Northwood Architects Ltd. 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 March 31, 2014, its fiscal year end. All accounts have normal balances.

The note payable is due in 2016. Th ere are 1,500 preferred and 75,000 common shares issued.
Instructions
(a) Prepare an income statement, statement of retained earnings, and balance sheet.
(b) Calculate return on equity. Note: No shares were issued during the year.
Taking It Further
Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet?

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Accounts payable Accounts receivable Accumulated depreciation-equipment Income tax expense 3 Interest expense Note payable Preferred shares Cash dividends-common Cash dividends-preferred Consulting revenue Depreciation expense Dividends payable Retained earnings Salaries expense Salaries payable Supplies expense