The following items are taken from the financial statements of Alfredo Inc. for 2008 Accounts Payable ........................................................................$15,000

Question:

The following items are taken from the financial statements of Alfredo Inc. for 2008

Accounts Payable ........................................................................$15,000

Accounts Receivable ...................................................................$11,000

Accumulated Amortization—Video Equipment ........................$28,000

Advertising Expense ...................................................................$21,000

Cash ............................................................................................$15,000

Common Shares .........................................................................$90,000

Amortization Expense ................................................................$12,000

Dividends ...................................................................................$14,000

Insurance Expense ........................................................................$3,000

Note Payable ..............................................................................$70,000

Prepaid Insurance .........................................................................$6,000

Rent Expense ..............................................................................$17,000

Retained Earnings (January 1, 2008 Balance) ............................$12,000

Salaries Expense .........................................................................$32,000

Salaries Payable ............................................................................$3,000

Service Revenue ........................................................................$143,000

Supplies .........................................................................................$4,000

Supplies Expense ..........................................................................$6,000

Video Equipment ......................................................................$210,000

Income Tax Expense ...................................................................$10,000

Required

(a) Calculate the net earnings. (Do not prepare a Statement of Earnings)

(b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2008. (Do not prepare a Statement of Retained Earnings)

(c) Prepare a classified balance sheet for Alfredo Inc. as at December 31, 2008 assuming the note payable is a long-term liability.

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