Sears Labs’ financial accounts follow. The company has just completed its third year of operations ended November 30, 2014.
Accounts Payable............. $ 7,400
Accounts Receivable........... 9,100
Cash.................. 141,600
Design Service Revenue.......... 248,000
Marketing Expense............ 19,700
Office Rent Expense........... 18,200
Owner’s Capital, November 30, 2013.... 70,400
Salaries Expense............ 96,000
Salaries Payable............. 2,700
Supplies................ 800
Supplies Expense............ 3,100
Withdrawals............. 40,000

Required
1. Prepare Sears Labs’ income statement, statement of owner’s equity, and balance sheet. There were no investments by the owner during the year.
2. Evaluate the company’s ability to meet its bills when they come due.