Clear Communications reported the following figures from its adjusted trial balance for its first year of business, which ended on July 31, 2025. All accounts have normal balances. 

Requirements 

1. Prepare Clear Communications’ statement of retained earnings for the year ended July 31, 2025. Assume that there were no dividends declared during the year and that the business began on August 1, 2024. 

2. Prepare Clear Communications’ classified balance sheet at July 31, 2025. Use the report format.

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Cash Selling Expenses Accounts Payable Common Stock Notes Payable, long-term Merchandise Inventory Administrative Expenses Sales Returns and Allowances $4,100 Cost of Goods Sold 1,300 Equipment, net 4,900 Accrued Liabilities 2,820 Sales Revenue 400 Accounts Receivable 1,200 Interest Expense 3,100 Sales Discounts 7,400 $ 18,800 8,500 2,000 42,000 3,400 20 4,300