On January 1, 2023, Fireworks Fantasia entered its third year of operations. On December 31, 2023, Wes Gandalf, the owner, finalized the company’s records that showed the following items.

Required
Prepare an income statement and statement of changes in equity for the year ended December 31, 2023, and a December 31, 2023, balance sheet, similar to Exhibits 1.8, 1.9, and 1.10.

The ending capital balance for one period is the beginning capital balance for the next period. The owner made investments of $30,000 during the year ended December 31, 2023.

Analysis Component:
Analyze the balance sheet and calculate what percentage of the assets at December 31, 2023, were financed by (a) debt and (b) equity.

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Accounts payable Accounts receivable Advertising expense Building Cash Fireworks supplies Fireworks supplies expense Land Office equipment Office supplies Office supplies expense Rent revenue Service Revenue $58,000 14,000 9,000 Tools Utilities expense Wages expense 81,000 8,000 49,000 77,500 63,000 14,000 3,000 3,600 66,000 140,000 18,000 25,100 92,000 Wes Gandalf, capital, December 31, 2022* 175,200 Wes Gandalf, withdrawals 12,000