Accent Photography, Inc., works weddings and prom-type parties. The balance of retained earnings was \($20,000\) at December 31, 2010. At December 31, 2011, the business’s accounting records show these balances:

Requirement

1. Prepare the following financial statements for Accent Photography for the year ended December 31, 2011:

a. Income statement

b. Statement of retained earnings

c. Balance sheet

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Insurance expense $ 8,000 Accounts receivable $ 10,000 Cash 31,000 Note payable 12,000 Accounts payable 6,000 Retained earnings ? Advertising expense 1,000 Salary expense 27,000 Service revenue 81,000 Equipment 60,000 Dividends 15,000 Common stock 33,000