Alfredo Company sells several types of pasta and sauce to grocery chains. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2022 appears below.

Account Title

Debit

Credit

Cash

30,000

Accounts Receivable

40,000

Allowance for Doubtful Accounts

4,000

Investments - Available for Sale

120,000

Supplies

1,500

Inventory

60,000

Notes Receivable

20,000

Prepaid Insurance

7,000

Office equipment

90,000

Accumulated Depreciation

40,000

Accounts payable

31,000

Notes Payable

50,000

Common Stock

60,000

Retained Earnings

28,500

Sales Revenue

390,000

Cost of Goods Sold

90,000

Salaries expense

118,900

Rent expense

13,000

Supplies expense

2,100

Advertising Expense

3,000

Totals

599,500

599,500

Information necessary to prepare the year-end adjusting entries appears below.

1. Office equipment is depreciated at a rate of 10% per year.

2. Employees are paid weekly on Friday, for the previous 5-day work week. Employees were paid on Friday, December 30, for the week ended Friday, December 23rd.

3. On October 1, 2022, Alfredo borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 6%. The principal is due in 10 years.

4. On March 1, 2022, the company lent a supplier $20,000 and a note was signed requiring principal and interest at 5% to be paid February 28, 2023.

5. On April 1, 2022 the company paid an insurance company $7,000 for a one-year fire insurance policy.

6. $600 of supplies remained on hand at December 31, 2022.

7. The company received $3,000 from a customer in December for 1,500 pounds of spaghetti to be delivered in January 2023.

8. Management estimates that 5% of receivables will become uncollectible.

9. In March, 2022, the company invested $120,000 in stock of a start-up company. As of December 31, 2022, the investment's fair value is $170,000

The company's stock consists of 60,000 shares of no par value stock. This is the maximum amount of shares authorized. The income tax rate is 21%.

Required:

a. Using the information provided, prepare a 10-column worksheet for Alfredo's for the year ended December 31, 2022.

b. Prepare a separate worksheet showing your adjusting entries in good form.

c. Prepare a multiple step income statement, statement of retained earnings and a classified balance sheet. A statement of cash flow is not required.