PROBLEM 2 (45 marks): Based on the following trial balance for Smyth's Repair Shop, prepare an income statement, statement of owner's equity, and a balance sheet. Smyth made no additional investments in the company during the year. Smyth's Repair Shop Trial Balance December 31 $ 12,500 1,500 500 27,000 33,000 $ 2,600 39,525 Cash Accounts receivable Supplies Repair shop equipment Service truck Accounts payable Smyth, Capital. Smyth, Withdrawals.. Service Revenue.... Supplies expense. Rent expense Utilities expense.. Gas expense Wages expense... Totals......... 36,000 125,000 3,425 18,000 6,000 7,200 22.000 $167.125 167,125 ====== PROBLEM 3 (25 marks) The following are all of the accounts of Flaherty Company that have a balance at the end of August. All accounts have normal balances: Accounts receivable...... Equipment.......... Service revenues earned Rent expense Office supplies Notes payable....... $36,000 59,000 75,000 3,600 1,500 22,000 Cash Advertising expense Accounts payable J. Flaherty, Withdrawals Salaries expense J. Flaherty, Capital $27,000 5,000 31,000 24,000 30,000 58,100 a. Calculate net income. b. Determine the amount of owner's equity to be shown on the August 31 balance sheet