The following account balances were included in the trial balance of Twain Corporation at June 30, 2020.

The Retained Earnings account had a balance of $337,000 at July 1, 2019. There are 80,000 shares of common stock outstanding.

Instructions

a. Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020.

b. Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2020.

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Sales revenue $1,578,500 Depreciation expense (office furniture and equipment) $ 7,250 Sales discounts 31,150 Cost of goods sold Salaries and wages expense (sales) 896,770 56,260 Property tax expense Bad debt expense (selling) Maintenance and repairs expense (administration) Office expense 7,320 4,850 Sales commissions 97,600 28,930 Travel expense (salespersons) Delivery expense Entertainment expense 9,130 6,000 21,400 Sales returns and allowances 14,820 62,300 Telephone and Internet expense (sales) Depreciation expense (sales equipment) Maintenance and repairs expense (sales) Miscellaneous selling expenses Office supplies used Telephone and Internet expense (administration) Dividends received 9,030 38,000 18,000 Interest expense 4,980 102,000 6,200 Income tax expense 4,715 Depreciation understatement 3,450 due to error-2017 (net of tax) 17,700 Dividends declared on preferred stock Dividends declared on common stock 2,820 9,000 37,000