(a) prepare an income statement and a statement of retained earnings for the year ending December 31,2017, and an unclassified balance sheet at December 31.

(b) Answer the following questions. (1) If the note has been outstanding 6 months, what is the annual interest rate on the note? (2) If the company paid $17,500 in salaries in 2017, what was the balance in salaries and wages payable on December 31,2016