required information\nuse the following information for the exercises below. (algo)\nthe following…

required information\nuse the following information for the exercises below. (algo)\nthe following information applies to the questions displayed below.\nstark company has the following adjusted accounts and normal balances at its december 31 year - end.\nnotes payable $25,000 accumulated depreciation - buildings $29,000\nprepaid insurance 3,900 accounts receivable 6,800\ninterest expense 780 utilities expense 2,700\naccounts payable 8,500 interest payable 660\nwages payable 1,800 unearned revenue 1,500\ncash 38,000 supplies expense 480\nwages expense 8,900 buildings 180,000\ninsurance expense 3,200 stark, withdrawals 10,000\nstark, capital 108,800 depreciation expense - buildings 9,000\nservices revenue 90,000 supplies 1,500\nexercise 3 - 17 (algo) preparing financial statements lo p5\nuse the adjusted accounts for stark company to prepare the (1) income statement and (2) statement of owners equity for the year ended december 31 and (3) balance sheet at december 31. the stark, capital account balance was $108,800 on december 31 of the prior year, and there were no owner investments in the current year.\ncomplete this question by entering your answers in the tabs below.

required information\nuse the following information for the exercises below. (algo)\nthe following information applies to the questions displayed below.\nstark company has the following adjusted accounts and normal balances at its december 31 year - end.\nnotes payable $25,000 accumulated depreciation - buildings $29,000\nprepaid insurance 3,900 accounts receivable 6,800\ninterest expense 780 utilities expense 2,700\naccounts payable 8,500 interest payable 660\nwages payable 1,800 unearned revenue 1,500\ncash 38,000 supplies expense 480\nwages expense 8,900 buildings 180,000\ninsurance expense 3,200 stark, withdrawals 10,000\nstark, capital 108,800 depreciation expense - buildings 9,000\nservices revenue 90,000 supplies 1,500\nexercise 3 - 17 (algo) preparing financial statements lo p5\nuse the adjusted accounts for stark company to prepare the (1) income statement and (2) statement of owners equity for the year ended december 31 and (3) balance sheet at december 31. the stark, capital account balance was $108,800 on december 31 of the prior year, and there were no owner investments in the current year.\ncomplete this question by entering your answers in the tabs below.

Answer

Explanation:

Step1: Calculate net income for income statement

Net income = Services revenue - (Interest expense + Wages expense + Insurance expense + Supplies expense + Depreciation expense - Buildings) Net income = $90,000-(2,700 + 8,900+3,200 + 480+9,000)$ Net income = $90,000 - 24,280$ Net income = $65,720$

Step2: Calculate ending owner's equity for statement of owner's equity

Ending owner's equity = Beginning owner's equity + Net income - Withdrawals Ending owner's equity = $108,800+65,720 - 10,000$ Ending owner's equity = $164,520$

Step3: Classify assets, liabilities and owner's equity for balance - sheet

Assets: Cash = $38,000$ Accounts receivable = $6,800$ Prepaid insurance = $3,900$ Supplies = $1,500$ Buildings = $180,000$ Accumulated depreciation - Buildings = $29,000$ Net buildings = $180,000 - 29,000=151,000$ Total assets = $38,000 + 6,800+3,900 + 1,500+151,000$ Total assets = $201,200$

Liabilities: Notes payable = $25,000$ Accounts payable = $8,500$ Wages payable = $1,800$ Interest payable = $660$ Unearned revenue = $1,500$ Total liabilities = $25,000+8,500 + 1,800+660+1,500$ Total liabilities = $37,460$

Owner's equity: Stark, Capital = $164,520$

Answer:

Income Statement:

Particulars Amount ($)
Services revenue 90,000
Less: Expenses
Interest expense 2,700
Wages expense 8,900
Insurance expense 3,200
Supplies expense 480
Depreciation expense - Buildings 9,000
Total expenses 24,280
Net income 65,720

Statement of Owner's Equity:

Particulars Amount ($)
Beginning owner's equity 108,800
Add: Net income 65,720
Less: Withdrawals 10,000
Ending owner's equity 164,520

Balance Sheet:

Particulars Amount ($)
Assets
Cash 38,000
Accounts receivable 6,800
Prepaid insurance 3,900
Supplies 1,500
Buildings, net 151,000
Total assets 201,200
Liabilities
Notes payable 25,000
Accounts payable 8,500
Wages payable 1,800
Interest payable 660
Unearned revenue 1,500
Total liabilities 37,460
Owner's equity
Stark, Capital 164,520
Total liabilities and owner's equity 201,200