The following items are included in the financial statement of Rafco for 2019:

Instructions

a. Compute the net profit for the year.

b. What is the retained earnings figure that would appear on the balance sheet at December 31, 2019?

c. Prepare a classified balance sheet for Rafco at December 31, 2019, assuming the note payable is a long-term debt.

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Accounts payable $37,500 Accounts receivable $27,500 Accumulated depreciation-Video equipment $70,000 Advertising expense $52,500 Cash $60,000 Common stock $225,000 Depreciation expense $30,000 Dividends $37,500 Insurance expense $7,500 Note payable (due 2022) $175,000 Prepaid insurance $15,000 Rent expense $42,500 Retained earnings (beginning) $30,000 Salaries expense $85,000 Salaries payable $7,500 Service revenue $362,500 Supplies Supplies expense Video equipment $10,000 $15,000 $525,000