176.The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. Thestockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings) at January 1. Theshareholders invested in an additional $10,000 of common stock during the year. Net income for the year is$45,625.
Accounts payable$ 4,375Spa operating expense$23,760
Accounts receivable8,490Office expense2,470
Cash13,980Spa supplies9,230
Fees earned98,435Wages expense26,580
Spa furniture & equipment56,000Dividends38,170
Computers2,130
Prepare a statement of retained earnings for Rocky's Day Spa for the current year ended December 31.
177.Explain the interrelationship between the balance sheet and the statement of cash flows.
178.From the following list of items taken from Lamar’s accounting records, identify those that would appear on theincome statement.
(a)Rent expense
(b)Land
(c)Common stock
(d)Fees earned
(e)Dividends
(f)Wages expense
(g)Investment