Review Problem 21 Financial Statements 1. These items are taken from the 2010 Financial Statements of Caravello Inc., whose fiscal year ended. Dec. 31: Retained Earnings, Jan. 1 $16,000 Utilities Expense. 1,700 Equipment.... Accounts Payable. Cash..... Common Shares.. Salaries Payable. Dividends Service Revenue.. Prepaid Insurance. Repairs Expense REQUIRED: 1. Prepare a single-step formal financial statement using appropriate formatting 2. Prepare a formal Statement of Retained Earnings using appropriate formatting 3. Prepare, in proper format, a classified Balance Sheet for Caravello, dated Dec. 31, 2010 ........13,000 13,300 13,600 Depreciation Exp.............. $2,600 Accounts Receivable 13,500 Insurance Expense 2,200 Salaries Expense.. 35,000 Accumulated. Depreciation.. 5,600 20,000 ...3,000 2,000 65,000 3,500 1,800 Rent Expense..... .....12.000 Income Tax Expense.... Supplies........ Supplies Expense......... .700 Note Payable, due in 2010... 5,000 Short-Term Investments. 22.300 3,000 1,000