Using the information in Problem 4-8B, prepare an income statement and a statement of changes in equity for the year ended December 31, 2020, and a classified balance sheet at December 31, 2020. The owner made no additional investments during the year. A $2,500 payment on the long-term notes payable will be made during 2021. Also, $1,500 of the notes receivable will be collected by December 31, 2021.

Analysis Component: Bullseye Market Research Company?s equity increased by $2,390 during 2020. What effect does an increase in equity have on the other major components of the balance sheet?

Problem 4-8B

Bullseye Market Research Company (BMRC) specializes in conducting focus groups for businesses launching a new product. BMRC analyzes customer likes and dislikes to ensure new products will be successful.

Debit No. Account Credit $ 100 Accounts payable.. 201 $2,000 108 Accounts receivable Accumulated depreciation, equipment. 168 7,250 184 Accumulated depreciation, office furniture 3,100 101 Cash 1,500 Consulting revenue. 302 44,000 194 Copyright. 4,200 Dan Eagle, capital. Dan Eagle, withdrawals. Depreciation expense, office furniture 251 24,715 301 3,500 606 700 167 Equipment. 16,000 Insurance expense 633 600 401 Interest income... 70 623 Interest expense 30 233 Long-term notes payable. 4,000 145 Notes receivable. 5,000 183 5,100 Office furniture. 104 Short-term investments. 4,000 750 126 Supplies. Supplies expense. 2,150 637 Telephone expense.. 652 470 Unearned consulting revenue. 203 3,375 688 Utilities expense. 3,230 612 Wages expense.. 37,380 $86,610 $86,610 Totals.