What is the income statemen, owners equity, balance sheet
Transcribed Image Text:**Stark Company Adjusted Trial Balance Overview**
Below are the accounts and balances extracted from the adjusted trial balance of Stark Company. These financial details are critical for preparing the company's financial statements, including the income statement, statement of owner's equity, and the balance sheet for the fiscal year ending December 31.
**Account Balances:**
- **Notes Payable:** $20,000
- **Prepaid Insurance:** $3,400
- **Interest Expense:** $680
- **Accounts Payable:** $6,000
- **Wages Payable:** $2,400
- **Cash:** $8,400
- **Wages Expense:** $8,400
- **Insurance Expense:** $2,300
- **Stark, Capital:** $78,000
- **Services Revenue:** $65,000
- **Accumulated Depreciation—Buildings:** $24,000
- **Accounts Receivable:** $5,800
- **Utilities Expense:** $2,200
- **Interest Payable:** $460
- **Unearned Revenue:** $1,250
- **Supplies Expense:** $380
- **Buildings:** $130,000
- **Stark, Withdrawals:** $7,500
- **Depreciation Expense—Buildings:** $6,500
- **Supplies:** $1,250
**Instructions for Financial Statement Preparation:**
1. Prepare the income statement for the year ending December 31.
2. Prepare the statement of owner's equity for the same period.
3. Prepare the balance sheet as of December 31.
**Starting Balance for Capital Account:**
- As of the prior year, the Stark, Capital account balance was $78,000.
**Guidance for Completion:**
To complete this question, fill in the necessary details in the accounting templates provided for each financial statement type. This exercise will help you understand the relationships among different financial accounts and how they reflect a company’s performance and financial position.
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
Expert Solution
Step 1
Income Statement is an account prepared to record all the expenses and revenues of a particular financial year to calculate the net income for the same period.
Statement of changes in owner's equity is an account prepared to record the changes in the capital account of proprietor.
Balance Sheet is an account prepared to record the year end values of assets and liabilities held/owed by the firm.
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