Problem $1$:Rescue Records needs rescuing. The downloading of songs and other media are killing its business. The owners of Rescue want to know if they made a net income or a net loss for the year ended December $31.$ Given the following account balances, prepare an income statement for Rescue similar to Figure $3\mathrm{.}1$Income Statement$.$ Excel form.

Advertising Expense $$4,600$

Salary Expense $$25,470$

Cost of Goods Sold $$109,000$

Sales Revenue $$197,000$

Income Tax Expense $$3,800$

Loss on Sale of Extra shelving units $$4,090$

Rent Expense $$32,000$

Problem $2$:

Your lawn care business, A Cut Above, has grown beyond your wildest dreams$$to the point where you would like to buy some new equipment and hire some people to help you. Unfortunately, you don$$t have that kind of money sitting around, so you are applying for a loan. The bank has requested financial statements, including, of course, a balance sheet. The following are the balances you have on $5/31.$ Prepare a classified $($show current and long term$)$ balance sheet to submit to the bank.

Cash $$2,400$

Prepaid Insurance $$1,400$

Note Payable Due Two Years from Now $($Loan from Mom$)$ $$5,000$

Capital Stock $($Money You Invested to Start Business$)$ $$2,000$

Accounts Receivable $$500$

Supplies Inventory $$300$

Equipment, Net $$3,000$

Accounts Payable $$300$

Retained Earnings $$300$