Question

Gear Heads, Inc. restores antique automobiles. The common shares and retained earnings balances of the corporation were $20,000 and $32,000 respectively at December 31, 2012. During 2013, the corporation paid $40,000 in dividends to its shareholders. At December 31, 2013, the business’s accounting records show these balances:
Accounts Receivable $5,000
Note Payable 25,000
Retained Earnings ?
Salary Expense 14,000
Equipment 78,000
Insurance Expense 4,000
Cash $ 7,000
Accounts Payable 2,000
Advertising Expense 3,000
Service Revenue 72,000
Common Shares 20,000
Requirement
Prepare the following financial statements for Gear Heads, Inc.:
a. Income statement for the year ended December 31, 2013
b. Statement of retained earnings for the year ended December 31, 2013
c. Statement of financial position at December 31, 2013


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  • CreatedJuly 08, 2015
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