Question 1.(20 marks)

a)Fort Road Foxtrot's adjusted trial balance for December 2018 is given. Prepare Income Statement and Balance sheet. (15 marks)

Inventory

$ 6,500

Common stock

45,000

Cash

16,550

Operating expenses

1,350

Notes payable

600

Interest expense

900

Depreciation expense

1,200

Net sales

12,800

Accounts receivable

9,600

Accounts payable

4,800

Long-term debt

55,000

Cost of goods sold

5,750

Buildings and equipment

122,000

Accumulated depreciation

34,000

Taxes

1,440

Retained earnings

15,250

b) "Window dressing "in accounting is evil. Explain the statement and advise measures tocounter this.