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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.
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.

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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