On December 31, Fighting Okra Cooking Services reports the following revenues and expenses.

On December 31, Fighting Okra Cooking Services reports the following revenues and expenses.

Service revenue $77,000 Postage expense 1,600 Legal fees expense 2,500 Rent expense 10,800 Salaries expense 26,000 Supplies expense 15,500 In addition, the balance of common stock at the beginning of the year was $300,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $27,000 and paid dividends of $14,000. Required: a. Prepare an income statement. b. Prepare a statement of stockholders' equity.

Answers

See below

Explanation:

A. Income statement

Service revenue

$77,000

Less:

Postage expenses

$1,600

Legal fees expense

$2,500

Rent expense

$10,800

Salaries expense

$26,000

Supplies expense

$15,500

Net income

$20,600

B. Statement of stockholder equity

This is computed as

= Total assets - Total liabilities

= Retained earnings $36,00 + Dividends $14,000 + Net income $20,600 - $300,000

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