Question

Picture Perfect Photography works weddings and prom-type parties. The balance of retained earnings was \(16,000 at December 31, 2017. At December 31, 2018, the business’s accounting records show these balances: Insurance Expense \) 6,000 Accounts Receivable $ 13,000 Cash 42,000 Notes Payable 14,000 Accounts Payable 11,000 Retained Earnings, Dec. 31, 2018 ? Advertising Expense 4,000 Salaries Expense 25,000 Service Revenue 75,000 Equipment 46,000 Dividends 8,000 Common Stock 28,000 Prepare the following financial statements for Picture Perfect Photography for the year ended December 31, 2018: a. Income statement. b. Statement of retained earnings. c. Balance sheet

Short answer

Picture Perfect Photograph
Balance Sheet
December 31, 2018
Assets		Liabilities
Cash	$42,000	Accounts Payable	$11,000
Accounts Receivable	13,000	Notes Payable	14,000
Equipment	46,000	Total Liabilities	25,000
		Stockholders’ Equity
		Common Stock	28,000
		Retained Earnings	48,000
		Total Stockholders’ Equity	76,000
Total Assets	$101,000	Total Liabilities and Stockholders’ Equity	$101,000

Step-by-step solution

Explanation on Balance Sheet

Balance sheet reports the final balances of assets, liabilities, and stockholders’ equity at the end of particular accounting period.

Details of balance sheet

In the balance sheet, total assets equals $101,000, total liabilities equals $25,000, and total stockholders’ equity equals $76,000.