The assets and liabilities of Full Moon Products, Inc., as of December 31, 2018, and revenues and expenses for the year ended on that date are as follows:

Beginning retained earnings was $364,800, and dividends declared and paid totaled $108,000 for the year.

Requirements

1. Prepare the income statement of Full Moon Products, Inc., for the year ended December 31, 2018.

2. Prepare the company’s statement of retained earnings for the year.

3. Prepare the company’s balance sheet as of December 31, 2018.

4. Analyze Full Moon Products, Inc., by answering these questions:

a. Was Full Moon profitable during 2018? By how much?

b. Did retained earnings increase or decrease? By how much?

c. Which is greater, total liabilities or total stockholders’ equity? Who has a greater claim to Full Moon Products’ assets: its creditors or its stockholders?

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$ 115,000 Land... Note payable.. Property tax expense. Rent expense. Accounts receivable. Service revenue. $ 29,000 99,200 Equipment.. Interest expense. Interest payable. Accounts payable. Salary expense.. Building. 10,000 2,800 ....... 7,300 41,000 85,000 451,600 6,200 8,100 25,000 108,900 405,000 46,000 . ......... Cash. . Common stock.. Supplies.. Utilities expense 26,100