Chapter 1, Problem 1.43BE

LO 4

(Learning Objective 4: Construct an income statement, statement of retained earnings, and balance sheet) During 2018, Brewster Company earned revenues of $146 million. Brewster incurred, during that same year, salary expense of $28 million, rent expense of $23 million, and utilities expense of $19 million. Brewster declared and paid dividends of $15 million during the year. At December 31, 2018, Brewster had cash of $175 million, accounts receivable of $85 million, property and equipment of $39 million, and other long-term assets of $25 million. At December 31, 2018, the company owed accounts payable of $56 million and had a long-term note payable of $33 million. Brewster began 2018 with a balance in retained earnings of $76 million At December 31.2018. Brewster had total stockholders' equity of $235 million, which consisted of common stock and retained earnings. Brewster has a year-end of December 31. Prepare the following financial statements (with proper headings) for 2018.

1. 1. Income statement.
2. 2. Statement of retained earnings, and
3. 3. Balance sheet.