O'Shea Enterprises started the 2002 accounting period with$30,000 of assets (all cash), $18,000 of liabilities, and $4,000 ofcommon stock. During the year, O'Shea earned cash revenues of$48,000, paid cash expenses of $32,000, and paid a cash dividend to stockholders of $2,000. O'Shea also acquired $10,000 ofadditional cash from the sale of common stock and paid $6,000 cashto reduce the liability owed to a bank.
Required
a. Prepare an income statement, statement of changes instockholders' equity, period-end balance sheet, and statementof cash flows for the 2002 accounting period. (Hint: Determine theamount of beginning retained earnings before considering theeffects of the current period events. It also might help to recordall events under an accounting equation before preparing thestatements.)
b. Determine the percentage of total assets that were providedby creditors, investors, and earnings.