You are provided with the following information for Kiltie Corporation, effective as of its April 30, 2007, year-end.

Instructions

(a) Prepare an income statement and a retained earnings statement for Kiltie Corpora-

Accounts payable Accounts receivable Accumulated depreciation Depreciation expense Cash Common stock Dividends Equipment Sales revenue Income tax expense Income taxes payable Interest expense Interest payable Long-term notes payable Prepaid rent Rent expense Retained earnings, beginning Salaries expense tion for the year ended April 30, 2007.

(b) Prepare a classified balance sheet for Kiltie as of April 30, 2007.

(c) Explain how each financial statement interrelates with the others.