The assets and liabilities of Beckwith Garden Supply, Inc., as of December 31, 2017, and revenues and

Question:

The assets and liabilities of Beckwith Garden Supply, Inc., as of December 31, 2017, and revenues and expenses for the year ended on that date follow:

Equipment.............................................................................................. $119,000

Interest expense......................................................................................... 10,200

Interest payable.......................................................................................... 2,500

Accounts payable...................................................................................... 24,000

Salary expense......................................................................................... 108,500

Building................................................................................................... 401,000

Cash.............................................................................................................41,000

Common shares............................................................................................12,700

Land......................................................................................................... $ 27,000

Note payable................................................................................................99,500

Property tax expense..................................................................................... 7,300

Rent expense............................................................................................... 40,600

Accounts receivable..................................................................................... 84,600

Service revenue.......................................................................................... 457,600

Supplies........................................................................................................... 6,800

Utilities expense............................................................................................. 8,500

Beginning retained earnings was $364,200, and dividends declared totaled $106,000 for the year.

Requirements

1. Prepare the income statement of Beckwith Garden Supply, Inc., for the year ended

December 31, 2017.

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

3. Prepare the company's balance sheet at December 31, 2017.

4. Analyze Beckwith Garden Supply, Inc., by answering these questions:

a. Was Beckwith Garden Supply profitable during 2017? By how much?

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

c. Which is greater, total liabilities or total shareholders' equity? Who has a greater claim to Beckwith Garden Supply's assets, creditors of the company or the Beckwith Garden Supply shareholders?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...