Preparing financial statements and evaluating business performance [20-30 min]Presented he...

Preparing financial statements and evaluating business performance [20-30 min]

Presented here are the accounts of Gate City Answering Service Corporation for the year ended December 31, 2012.

Requirements

1. Prepare Gate City Answering Service Corporation’s income statement.

2. Prepare the statement of retained earnings.

3. Prepare the balance sheet.

4. Answer these questions about the company:

a. Was the result of operations for the year a profit or a loss? How much?

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b. How much in total economic resources does the company have as it moves into the new year?

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c. How much does the company owe to creditors?

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d. What is the dollar amount of the stockholders’ equity in the business at the end of the year?