Question

On December 31, 2021, Fighting Okra Cooking Services reports the following revenues and expenses. Service revenue Postage expense Legal fees expense $82,000 1,850 2,750 Rent expense Salaries expense Supplies expense 11,300 31,000 18,000 In addition, the balance of common stock at the beginning of the year was $550,000, and the balance of retained earnings was $46,000. During the year, the company issued additional shares of common stock for $32,000 and paid dividends of $24,000. Required: 1. Prepare an income statement. 2. Prepare a statement of stockholders' equity. Stmt of Income Statement Stockholders Equity Prepare an Income Statement. FIGHTING OKRA COOKING SERVICES Income Statement For the Year Ended December 31, 2021 Expenses: Total Expenses < Income Statement Stmt of Stockholders Equity >

Answer 1

Answer 1)

FIGHTING OKRA COOKING SERVICES
Income Statement
For the year ended December 31, 2021
Service Revenue		$82,000
Expenses:
Postage Expense	$1,850
Legal Fees Expense	$2,750
Rent Expense	$11,300
Salaries Expense	$31,000
Supplies Expense	$18,000
Total Expenses		$64,900
Net Income		$17,100

Net Income = Total Revenue - Total Expenses

Total Revenue = Service Revenue

= $82,000

Total Expenses = Postage Expense + Legal Fees Expense + Rent Expense + Salaries Expense + Supplies Expense

= $1,850 + $2,750 + $11,300 + $31,000 + $18,000

= $64,900

Therefore, Net Income = $82,000 - $64,900

= $17,100

Answer 2)

FIGHTING OKRA COOKING SERVICES
Statement of Stockholder's Equity
For the year ended December 31, 2021
	Common Stock	+	Retained Earnings	=	Total Stockholder's Equity
Beginning Balance	$550,000	+	$46,000	=	$596,000
Add : Issuance of Common Stock	$32,000	+		=	$32,000
Add : Net Income		+	$17,100	=	$17,100
Less : Dividends Paid		+	($24,000)	=	($24,000)
Ending Balance	$582,000	+	$39,100	=	$621,100

Beginning Balance of Stockholder's Equity + Issuance of Common Stock + Net Income - Dividend Paid = Ending Balance of Stockholder's Equity

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