The financial statement columns of the work sheet for Acme Company at December 31, 2007, are as follows:

                                                                             Acme  Company
                                                                               Work  Sheet                                                                  
                                                              For the year ended December 31, 2007

                                                          Income Statement                    Balance  Sheet
                                                   ------------------------------                 -------------------------

       Accounts                                                             Debit              Credit                  Debit              Credit
     -------------------                                                ----------           -----------          -------------         ------------    
     Cash                                                                                                                   $14000
     Accounts  Receivable                                                                                             11000
     Supplies                                                                                                                  4000
     Prepaid  Insurance                                                                                                   6000
     Video  Equipment                                                                                                 210000
     Accumulated  Depreciation--
         Video  Equipment                                                                                                                     26000
     Accounts  Payable                                                                                                                       24000
     Note  Payable                                                                                                                              60000
     Salaries  Payable                                                                                                                           3000
     Common  Stock                                                                                                                           90000
     Retained  Earnings                                                                                                                       22000
     Dividends                                                                                                              15000
     Video  Rental  Revenue                                                                138000
     Advertising  Expense                                               21000
     Depreciation  Expense                                             12000
     Insurance  Expense                                                   3000        
     Rent  Expense                                                        17000  
     Salaries  Expense                                                   44000
     Supplies  Expense                                                    6000   
                                                                                 -------------         -------------            --------------          ------------
              Totals                                                          103000            138000               260000             225000
     Net  Income                                                            35000                                                               35000
                                                                                --------------         --------------           --------------          --------------
                                                                                 138000            138000               260000             260000     

     Instructions:
       (a)  Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2007. 
       (b)  Prepare a classified balance sheet for Acme Company at December 31, 2007 assuming the note payable is a