These financial statement items are for Barone Corporation at year-end, July 31, 2010.Salaries payable ………… $ 2,080Salaries expense ………… 51,700Utilities expense ………… 22,600Equipment …………… 18,500Accounts payable …………. 4,100Commission revenue ……….. 66,100Rent revenue …………… 8,500Long-term note payable ………. 1,800Common stock …………. 16,000Cash …………….. 29,200Accounts receivable ……….. 9,780Accumulated depreciation ………. 6,000Dividends …………… 4,000Depreciation expense ………… 4,000Retained earnings (beginning of the year) …. 35,200Instructions(a) Prepare an income statement and a retained earnings statement for the year. Barone Corporation did not issue any new stock during the year.(b) Prepare a classified balance sheet at July 31.(c) Compute the current ratio and debt to total assets ratio.(d) Suppose that you are the president of Allied Equipment. Your sales manager has approached you with a proposal to sell $20,000 of equipment to Barone. He would like to provide a loan to Barone in the form of a 10%, 5-year note payable. Evaluate how this loan would change Barone’s current ratio and debt to total assets ratio, and discuss whether you would make the sale.View Solution:
These financial statement items are for Barone Corporation at ye



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