The following items are included in the financial statement of ABC BHD for 2019:

Instruction:

1. Compute the net profit for the year.

2. What is the retained earnings figure that would appear on the balance sheet at December 31, 2019?

3. Prepare a classified balance sheet for ABC BHD at December 31, 2019,assuming the note payable is a long-term debt

Accounts payable Accounts receivable Accumulated depreciation-Video equipment Advertising expense Cash Common stock Depreciation expense Dividends Insurance expense $37,500 $27,500 $70,000 $52,500 $60,000 $225,000 $30,000 $37,500 $7,500 Note payable (due 2022) Prepaid insurance Rent expense Retained earnings (beginning) Salaries expense Salaries payable Service revenue Supplies Supplies expense Video equipment $175,000 $15,000 $42,500 $30,000 $85,000 $7,500 $362,500 $10,000 $15,000 $525,000