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, 2021, its fiscal year end. All accounts have normal balances.

The note payable is due in 2023. There are 10,000 common shares issued and 5,000 preferred shares issued as at May 31, 2021.

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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Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Cash dividends-common Cash dividends-preferred Common shares Cost of goods sold Depreciation expense Dividends payable Equipment Income tax expense Insurance expense Interest expense $ 11,230 7,500 4,500 70,220 $ 38,500 15,300 126,000 20,600 Inventory Notes payable Preferred shares Rent expense Retained earnings Salaries expense Sales Supplies expense 75,000 150,000 24,500 73,000 67,800 504,500 5,875 50,000 7,500 50,000 277,475 42,000 7,500 420,000