2. The following items are taken from the financial statements of Tracy Company for 2014:

Accounts payable $10,000

Accounts receivable 11,000

Accumulated depreciationequipment 38,000

Advertising expense 21,000

Cash 14,000

Common stock 90,000

Depreciation expense 12,000

Dividends 15,000

Equipment 210,000

Insurance expense 3,000

Notes payable (due 2017) 70,000

Prepaid insurance 6,000

Rent expense 17,000

Retained earnings (beginning) 12,000

Salaries and wages expense 34,000

Salaries and wages payable 3,000

Service revenue 130,000

Supplies 4,000

Supplies expense 6,000

Instructions:

(a) Calculate the net income.

(b) Calculate the retained earnings balance that would appear on a balance sheet at December 31, 2014

(c) Prepare a classified balance sheet for Tracy Company at December 31, 2014 assuming the note payable is a long-term liability.

(d) Compute the current ratio, debt to assets ratio, and earnings per share value. The average number of shares outstanding for 2014 was 10,000.