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Question: These financial statement items are for Fairview Corporation at year-end, July 31, 2017

Instructions: (a) Prepare an income statement and a retained earnings statement for the year. Fairview Corporation did not issue any new stock during the year.

(b) Prepare a classified balance sheet at July 31.

(d) Suppose that you are the president of Lunar Equipment. Your sales manager has approached you with a proposal to sell $20,000 of equipment to Fairview. He would like to provide a loan to Fairview in the form of a 10%, 5-year note payable. Evaluate how this loan would change Fairview's current ratio and debt to assets ratio, and discuss whether you would make the sale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92651362

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