Assignment Question 1: The following items are taken from the financial statements of Planxty Ltd. for 2010: Income tax expense $ 1,000 Accounts payable 19,500 Accounts receivable 4,000 Accumulated depreciation – equipment 4,800 Bonds payable 18,000 Cash 22,000 Common shares (2,500 shares issued) 25,000 Cost of goods sold 12,000 Depreciation expense 4,800 Dividends 300 Equipment 48,000 Goodwill 7,500 Interest expense 3,500 Retained earnings, beginning 16,000 Salaries expense 8,200 Sales revenue 32,500 Supplies 4,500 Share price 4 Instructions (a) Prepare a statement of earnings for Planxty Ltd. for the year ended December 31, 2010 in proper format (12 marks) (b) Prepare a statement of retained earnings for Planxty Ltd. for the year ended December 31, 2010 in proper format (6 marks) (c) Prepare a classified balance sheet for Planxty Ltd. At December 31, 2010 in proper format (26 marks)

Question 2. Altan Sales Ltd. has just completed its first year of operations. Presented below are its Statement of Earnings and Balance Sheet. No dividends were declared or paid for the year.

Altan Sales LTD.
Statement of Earnings
Year Ended July 31, 2010

Sales $ A Operating expenses 31,000 Depreciation expense B Earnings before income tax expense C Income tax 1,000 Net earnings $ D

Altan Sales LTD.
Balance Sheet
Year Ended July 31, 2010 Assets Cash $2500 F Accounts receivable 200 Inventory 5,500 Prepaid rent 600 Equipment $13,000 Accumulated depreciation 2000 G 11,000 Total assets $19,800 H Liabilities and Shareholders' Equity Accounts payable $5,500 Notes payable 2000 I $ 7,500 Shareholders' equity Common shares (5,000 shares issued) $9,300 Retained earnings 3000 J Total shareholders’ equity