Questions: The following accounts and balances were drawn from the records of Barker Company at December 31, Year 2 - Supplies - Cash flow from investing activities - Prepaid insurance - Service revenue - Other operating expenses - Supplies expense - Insurance expense - Beginning common stock - Cash flow from operating activities - Common stock issued - 870 Beginning retained earnings - (6,800) Cash flow from financing activities - 2,400 Rent expense - 82,000 Dividends - 40,000 Cash - 240 Accounts receivable - 900 Prepaid rent - 1,000 Unearned revenue - 7,400 Land - 5,500 Accounts payable Required: Use the accounts and balances from Barker Company to construct an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows (show only totals for each activity on the statement of cash flows).

To construct the financial statements for Barker Company, we need to organize the provided information into the appropriate categories for each statement. Here’s how we can do it:

The income statement shows the company's revenues and expenses over a specific period, resulting in net income or loss.

Barker Company Income Statement For the Year Ended December 31, Year 2

| Revenues | | |-------------------------|----------------| | Service revenue | $82,000 | | Total Revenues | $82,000 | | | | | Expenses | | | Rent expense | $2,400 | | Other operating expenses| $11,980 | | Supplies expense | $870 | | Insurance expense | $240 | | Total Expenses | $15,490 | | | | | Net Income | $66,510 |

This statement shows changes in equity, including common stock and retained earnings, over a specific period.

Barker Company Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2

| Common Stock | | |-------------------------|----------------| | Beginning common stock | $19,000 | | Common stock issued | $5,200 | | Ending common stock | $24,200 | | | | | Retained Earnings | | | Beginning retained earnings | $6,800 | | Net income | $66,510 | | Dividends | $(40,000) | | Ending retained earnings | $33,310 |

The balance sheet shows the company's financial position at a specific point in time, including assets, liabilities, and equity.

Barker Company Balance Sheet As of December 31, Year 2

| Assets | | |-------------------------|----------------| | Cash | $37,000 | | Accounts receivable | $900 | | Prepaid insurance | $240 | | Prepaid rent | $1,000 | | Supplies | $870 | | Land | $7,400 | | Total Assets | $47,410 | | | | | Liabilities | | | Accounts payable | $5,500 | | Unearned revenue | $1,000 | | Total Liabilities | $6,500 | | | | | Stockholders' Equity| | | Common stock | $24,200 | | Retained earnings | $33,310 | | Total Equity | $57,510 | | | | | Total Liabilities and Equity | $64,010 |

The statement of cash flows shows the cash inflows and outflows from operating, investing, and financing activities over a specific period.

Barker Company Statement of Cash Flows For the Year Ended December 31, Year 2

| Cash Flows from Operating Activities | $(6,800) | |------------------------------------------|----------| | Cash Flows from Investing Activities | $19,000 | | Cash Flows from Financing Activities | $5,200 | | Net Increase in Cash | $17,400 | | Cash at Beginning of Year | $19,600 | | Cash at End of Year | $37,000 |

Note: The cash flow from operating activities appears to be negative, which might indicate an error in the provided data or a need for further breakdown. The cash at the beginning of the year is assumed to be $19,600 to reconcile the ending cash balance.

These statements provide a comprehensive view of Barker Company's financial performance and position for the year ended December 31, Year 2.