Question

Chapter 3 Graded o Check my Exercise 3-10 Preparing Financial Statements from a Trial Balance LO P6 Following are the accounts and balances from the adjusted trial balance of Stark Company. 2.2 points 8 00:40:41 Notes payable Prepaid insurance Interest expense Accounts payable Wages payable Cash Wages expense Insurance expense Stark, Capital Services revenue cBook $ 28,000 4,200 B40 10,000 2. 100 44,000 9.200 3.500 126, 800 105,000 Accumulated depreciation Buildings $ 32,000 Accounts receivable 7.400 Utilities expense 3,000 Interest payable Unearned revenue 1.550 Supplies expense 540 Buildings 210,000 Stark withdrawals 11.500 Depreciation expense Buildings 10,500 Supplies 1.650 References Prepare the (1) income statement and (2) statement of owner's equity for the year ended December 31, and (3) balance sheet at The Car Cantal account balance was $126,800 on December 31 of the prior year.

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Stark Company
Income Statement	Amount $
Service revenue	105,000.00
Less:
Wages Expense	9,200.00
Insurance Expense	3,500.00
Utilities Expense	3,000.00
Supplies Expense	540.00
Depreciation Expense- Buildings	10,500.00
Income before interest	78,260.00
Less: Interest Expense	840.00
Net Income	77,420.00
Statement of Owners Equity	Amount $
Opening Balance	126,800.00
Add: Net Income	77,420.00
Less: Withdrawals	11,500.00
Closing Balance	192,720.00
Balance Sheet
Assets	Amount $
Current Assets
Cash	44,000.00
Accounts Receivable	7,400.00
Supplies	1,650.00
Prepaid Insurance	4,200.00
Total Current Assets	57,250.00
Fixed Assets
Buildings	210,000.00
Accumulated Depreciation- Buildings	(32,000.00)
Total Fixed Assets	178,000.00
Total Assets	235,250.00
Liabilities & Stockholders' Equity
Liabilities	Amount $
Current Liabilities
Unearned Revenue	1,650.00
Accounts Payable	10,000.00
Interest Payable	780.00
Wages Payable	2,100.00
Total Current Liabilities	14,530.00
Long Term Liabilities
Notes Payable	28,000.00
Total Long Term Liabilities	28,000.00
Total Liabilities	42,530.00
Owner's Equity	192,720.00
Owner's Equity	192,720.00
Total Liabilities & Owner's Equity	235,250.00
US has absolute advantage because in 1 unit of labor and 1 unit of capital US can produce more vehicles (20) than Mexico (10).