Preparing Financial Statements & Evaluating Business Performance

Accent Photography works weddings and prom-type parties. The balance of capital was $20,000 at December 31, 2010. At December 31, 2011, the business’s accounting records show these balances: 

Insurance expense $8,000                 Accounts receivable   $10,000

Cash                          31,000              Note payable                 12,000

Accounts payable       6,000               Owner’s equity                     ?

Advertising expense    1,000              Salary expense               27,000

Service Revenue         81,000             Equipment                       60,000

Owner withdrawals 15,000                   Owner Investment            33,000

Requirement: Prepare the following financial statements for Accent Photography for the year ended December 31, 2011:

a. Income statement 

b. Statement of owner’s equity

c. Balance sheet