The following accounts and related balances of Etse Manufacturing Inc. are arranged in no particular order.

Required
1. Prepare the company's classified balance sheet in the report format at December 31, 2014.
2. Compute the rate of return on total assets and the rate of return on common shareholders' equity for the year ended December 31, 2014.
3. Do these rates of return suggest strength or weakness? Give your reason.

Transcribed Image Text:

Accounts Pavable Retained Earnings Common Shares, s 23,000 100,500 100,000 $36,000 Accrued Liabilities ? Long-term Note Payable Accounts Receivable, net Preferred Shares, $0.15 100,000 shares authorized, 33,000 shares 25,000 shares authorized, issued and outstanding Dividends Pavable Total assets, Dec. 31, 2013 567,500 Ieory Net income Common Shareholders 30,000 35,000 190,500 165,000 6,000 shares issued 4,500 Cash 140,750 Property, Plant, and Equipment, net Prepaid Expenses 381,000 15,500 37,000 Equity, Dec. 31, 2013 Interest Expense 520,000 10,850 Patent, net