P13.10A (LO 5.) AP Northwood Architects Ltd. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at March 31, 2024, its fiscal year end. All accounts have normal balances. Accounts payable Accounts receivable 38,700 Insurance expense $21,350 Income tax expense $ 16.535 6,550 Accumulated depreciation-equipment Cash 23,650 Interest expense 3,000 54,600 Notes payable 50,000 56,250 6,150. Common shares 35.800 Cash dividends-common Cash dividends-preferred Consulting revenue Depreciation expense Dividends payable Equipment There are 1,500 preferred and 75,000 common shares issued. Instructions 40,000 Preferred shares 4.500 Prepaid expenses 75,000 Rent expense 404.500 Retained earnings 11,825 Salaries expense 15,000 Salaries payable 64,800 245.400 2.310 224,000 Supplies expense 25,800 a. Prepare the statement of retained earnings, and the shareholders' equity section of the balance sheet. b. Calculate return on equity. Note: No shares were issued during the year. Taking It Further Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet? Calculate return on assets and equity, and comment.