What is the income statemen, owners equity, balance she

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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What is the income statemen, owners equity, balance sheet

**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.
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.
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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