1)It is almost midnight on December 31, 2020.Unfortunately, the computerized bookkeeping system at See-More Videos is not working properly.Instead of an adjusted trial balance, it keeps printing the accounts in alphabetical order:

Accounts Payable

$15,000

Accounts Receivable

11,000

Accumulated Depreciation - Video Equipment

28,000

Advertising Expense

21,000

Cash

19,000

Common Stock (Note: No stock transactions in 2020)

90,000

Depreciation Expense

12,000

Dividends

14,000

Insurance Expense

3,000

Notes Payable (due in 2023)

70,000

Prepaid Insurance

6,000

Rent Expense

17,000

Retained Earnings, January 1, 2020

12,000

Salaries Expense

32,000

Salaries Payable

3,000

Income Tax Expense

6,000

Video Equipment

210,000

Video Rental Revenue

133,000

Bill Fold, the CEO of See-More Videos, wants you to use this information to prepare the firm's 2020 financial statements.

a)Income Statement

b) Statement of Changes in Stockholders' Equities

c) Classified Balance Sheet

d)As CEO of See-More Videos, Bill Fold feels that the firm will need $500,000 for expansion in 2020.Since the firm does not have sufficient cash for this project, Mr. Fold is planning to ask the Board of Directors to approve either a new bond issue or a new stock issue.He has asked you to discuss the advantages and disadvantages of debt versus equity financing so that he can prepare proposal to bring before the Board of Directors.What would you tell him?