Question

The following accounts and balances were drawn from the records of Barker Company at December 31, 2018:

Supplies	$	690			Beginning retained earnings	$	19,000
Cash flow from investing act.		(6,400	)		Cash flow from financing act.		(5,700	)
Prepaid insurance		2,600			Rent expense		2,800
Service revenue		78,000			Dividends		4,900
Other operating expenses		42,000			Cash		10,900
Supplies expense		290			Accounts receivable		19,000
Insurance expense		1,000			Prepaid rent		5,000
Beginning common stock		1,100			Unearned revenue		6,400
Cash flow from operating act.		7,500			Land		38,000
Common stock issued		5,300			Accounts payable		17,380

Please prepare the income statement, stockholder equity, balance sheet and statement of cash flow

Answer 1

Ans. 1	BARKER COMPANY
	Income Statement
	For the Year Ended December 31 2018
	Particulars	Amount	Amount
	Revenues:
	Service revenue	$78,000
	Total revenue (a)		$78,000
	Less: Expenses:
	Other operating expenses	$42,000
	Supplies expense	$290
	Insurance expense	$1,000
	Rent expense	$2,800
	Total expenses (b)		$46,090
	Net Income (a - b)		$31,910
	*Net income is the excess of total revenues on expenses.
Ans. 2	BARKER COMPANY
	Statement of Stockholder's Equity
	For the Year Ended December 31 2018
		Common stock	Retained earnings	Total stockholder's equity
	Beginning balance	$1,100	$19,000	$20,100
	Issued common stock	$5,300		$5,300
	Net lncome		$31,910	$31,910
	Dividends		-$4,900	-$4,900
	Ending balance	$6,400	$46,010	$52,410
	*Total stockholder's equity = Common stock + Retained earnings
Ans. 3	BARKER COMPANY
	Balance Sheet
	For the Year Ended December 31 2018
	Assets:
	Cash	$10,900
	Supplies	$690
	Prepaid insurance	$2,600
	Prepaid rent	$5,000
	Accounts receivable	$19,000
	Land	38000
	Total Assets		$76,190
	Liabilities and Stockholder's Equity:
	Liabilities :
	Accounts payable	$17,380
	Unearned revenue	$6,400
	Total Liabilities		$23,780
	Stockholder's equity:
	Contributed capital	$6,400
	Retained earnings	$46,010
	Total Stockholder's Equity		$52,410
	Total Liabilities and Stockholder's Equity		$76,190
Ans. 4	BARKER COMPANY
	Statement of Cash Flows
	For the Year Ended December 31 2018
	Cash flow from operating activities	7500
	Cash flow from investing activities	-6400
	Cash flow from financing activities	-5700
	Net increase or (decrease) in cash		-$4,600
	Beginning cash balance		$15,500
	Ending cash balance		$10,900
	*Beginning cash balance = Ending cash balance - Net decrease in cash
	$10,900 - (-$4,600)
	$10,900 + $4,600
	$15,500