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    Single step income statement and retained earnings statement

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    P4-2 (Single-step Income, Retained Earnings, Periodic Inventory) Presented on page 158 is the trial
    balance of Mary J. Blige Corporation at December 31, 2007.
    MARY J. BLIGE CORPORATION
    TRIAL BALANCE
    YEAR ENDED DECEMBER 31, 2007
    Debits Credits
    Purchase Discounts $ 10,000
    Cash $ 205,100
    Accounts Receivable 105,000
    Rent Revenue 18,000
    Retained Earnings 260,000
    Salaries Payable 18,000
    Sales 1,000,000
    Notes Receivable 110,000
    Accounts Payable 49,000
    Accumulated Depreciation—Equipment 28,000
    Sales Discounts 14,500
    Sales Returns 17,500
    Notes Payable 70,000
    Selling Expenses 232,000
    Administrative Expenses 99,000
    Common Stock 300,000
    Income Tax Expense 38,500
    Cash Dividends 45,000
    Allowance for Doubtful Accounts 5,000
    Supplies 14,000
    Freight-in 20,000
    Land 70,000
    Equipment 140,000
    Bonds Payable 100,000
    Gain on Sale of Land 30,000
    Accumulated Depreciation—Building 19,600
    Merchandise Inventory 89,000
    Building 98,000
    Purchases 610,000
    Totals $1,907,600 $1,907,600

    A physical count of inventory on December 31 resulted in an inventory amount of $124,000.

    Instructions
    Prepare a single-step income statement and a retained earnings statement. Assume that the only changes
    in retained earnings during the current year were from net income and dividends. Thirty thousand shares
    of common stock were outstanding the entire year.

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