Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Co. for 2016. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.)

Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Co. for 2016. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.) (Balance Sheet only: Items to be deducted must be indicated with a minus sign.)

 

Salaries Expense	$	79,000		Operating Expenses	$	72,000
Common Stock		100,000		Cash Flow from Investing Activities		88,400
Notes Receivable (short term)		34,000		Prepaid Rent		13,500
Allowance for Doubtful Accounts		8,800		Land		50,000
Uncollectible Accounts Expense		9,100		Cash		49,100
Supplies		2,200		Inventory		99,300
Interest Revenue		6,400		Accounts Payable		56,000
Sales Revenue		360,000		Salaries Payable		22,000
Dividends		4,500		Cost of Goods Sold		158,000
Interest Receivable (short term)		2,500		Accounts Receivable		66,000
Beginning Retained Earnings		86,000

Explanation:

Retained earnings:

Must be computed as: $86,000 Beg. retained earnings + $48,300 Net income – $4,500 Dividends = $129,800

Thank you!