The following selected balance sheet amounts are from Aerial Inc. as of December 31. Selected Balance Sheet Amounts Assets Liabilities Cash $7,000 Accounts payable $ 2,400 Accounts receivable 2,500 Note payable 5,000 Supplies 1,900 Stockholders equity Equipment 12,500 Common stock 5,000 Paid-in capital in excess of par 2,500 Required a. Compute retained earnings as of December 31, assuming retained earnings is the only missing category in the selected balance sheet amounts above. Answer b. Determine net income assuming that the balance in retained earnings on January 1, was $1,250; dividends declared during the year were $2,250; and no other items affected retained earnings during the year