Carlotta's Cakes Inc. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at May 31, 2017, its fiscal year end. All accounts have normal balances.

The note payable is due in 2019. There are 10,000 common shares issued and 5,000 preferred shares issued as at May 31, 2017.
Instructions
Prepare an income statement, statement of retained earnings, and balance sheet.
TAKING IT FURTHER
What ethical issues may managers face when reporting a company's financial performance?

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11,230 7,500 4,500 70,220 75,000 150,000 24,500 73,000 67,800 504,500 5,875 Accounts payable Accounts receivable 38,500 15,300 126,000 20,600 50,000 7,500 50,000 277,475 Income tax expense Insurance expense Interest expense Inventory Notes payable Preferred shares Rent expense Retained earnings Salaries expense Accumulated depreciation-equiprm Cash Cash dividends-preferred Common shares Cost of goods sold Depreciation expense Dividend payable Equipment 7,500 420,000 Supplies expense