The following accounts and related balances of Surgical Products, Inc., are arranged in no particular order.

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1. Prepare the company's classified balance sheet in the account format at November 30, 19X7.

2. Compute rate of return on total assets and rate of return on common stockholders' equity for the year ended November 30, 19X7.

3. Do these rates of return suggest strength or weakness? Give your reason.

4. How will what you learned in this problem help you evaluate an investment?

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Dividends payable.. Total assets, November 30, 19X6... Net income....... Common stockholders' equity, November 30, 19X6.. Interest expense.... $ 3,000 Inventory... $181,000 781,000 Property, plant, and 36,200 equipment, net 378,000 Organization cost, net... 6,000 483,000 Prepaid expenses. 13,000 12,800 Patent, net. 31,000 Additional paid-in capital- Accrued liabilities. 17,000 common. 140,000 Long-term note payable. 104,000 Accounts payable.. 31,000 Accounts receivable, net.... 102,000 Retained earnings........ ? Preferred stock, 4%, S10 par, Common stock, $5 par, 25,000 shares authorized, 100,000 shares authorized, 3,700 shares issued. 37,000 42,000 shares issued 210,000 Cash................ 32,000