The note payable is due in 2019. There are 10,000 common shares issued and 5,000 preferred shares is

The note payable is due in 2019. There are 10,000 common shares issued and 5,000 preferred shares issued as at May 31, 2017.InstructionsPrepare an income statement, statement of retained earnings, and balance sheet.Solution: Computation of the following StatementCarlotta’s Cakes IncIncome StatementParticularsSalesLess cost of goods soldGross marginLess selling and administrative expenses:Insurance…