The assets and liabilities of Post Oak, Inc., as of December 31, 20X7, and revenues and expenses for the year ended on that date are listed here.

Beginning retained earnings was $111,000, and dividends totaled $42,000 for the year.
Required
1. Prepare the income statement of Post Oak, Inc., for the year ended December 31, 20X7.
2. Prepare the company's statement of retained earnings for the year.
3. Prepare the company's balance sheet at December 31, 20X7.
4. Analyze Post Oak by answering these questions: (Challenge)
a. Was Post Oak profitable during 20X7? By how much?
b. Did retained earnings increase or decrease? By how much?
c. Which is a greater, total liability or total equity? Who owns more of Post Oak's assets, creditors of the company or the Post Oak stockholders?

Transcribed Image Text:

$ 31,000 4,000 1,000 12,000 Accounts receivable....25,000 Salary expense..34,000 126,000 14,000 . 10,000 Land Note pa yable Property tax expense Kent expense. $ 8,000 Equipment 31,000 Interest expense 2,000 Interest payable 14,000 Accounts payable. ..140,000 Building Service revenue.... Supplies Utilities expense 2,000 Cash