Empire Stores, Ltd Required:
1

Empire Stores, Ltd., reported the following amounts on its statement of financial position on December 31, 20X2: $$\begin{array} { | l | r | } \hline \text { Inventory } & \$ 710,000 \\\hline \text { Notes payable } & 160,000 \\\hline \text { Cash } & 300,000 \\\hline \text { Share capital } & 900,000 \\\hline \text { Net property, plant and equipment } & 425,000 \\\hline \text { Trade receivables } & 88,000 \\\hline \text { Trade payables } & 131,000 \\\hline \text { Retained earnings } & ? \\\hline\end{array}$$ Required:
1. What is the amount of Empire's total assets at the end of 20X2?
2. Identify the items listed above that are liabilities.
3. What is the amount of Empire's retained earnings at the end of 20X2?
4. Prepare a statement of financial position for Empire Stores as of December 31, 20X2.
5. Empire Stores wishes to purchase merchandise from your company on account. The amount of the purchases would probably be about $5,000 per month, and the terms would require Empire to make payment in full within 30 days. Would you recommend that your company grant credit to Empire under these terms? Explain the reasoning for your response.