3). Put together a multiple-step income statement and statement of retained earnings for the year 2022. Assume a 20% tax rate and that 100,000 shares of common stock were outstanding during the year. Gastelum Company Multiple-Step Income Statement For the year ended December 31, 2022 Sales $ 1,500,000 Less: Cost of Goods Sold $ 700,000 Gross Profit $ 800,000 Less: Selling and Administrative Expense $ 290,000 Income From Operations $ 510,000 Other Revenue $ 90,000 Other Expense $ 100,000 Income From Continuing Operations Before Taxes $ 500,000 Income Tax @ 20% $ 100,000 Income From Continuing Operations $ 400,000 Loss from Discontinued operation (Note 1) $ 232,000 Net Income $ 168,000 Earnings per share ($100,000) $ 1.68 Gastelum Company Statement of Stockholders' Equity For the year Ended December 31, 2025 Total Retained Earnings Dividend Paid Common stock Beginning Balance 750000 650000 100000 Net Income 168000 168000 Dividend 50000 50000 Ending Balance 868000 818000 50000 100000 Note 1. Explanation of loss from Discontinued operation Loss from Discounted Operation 290000 Less: Income Tax Benefit 58000 Loss from Discounted Operation 232000 My instructor feedback is Question 3 is almost correct, except you have not shown enough detail related to earnings per share and have not handled dividends correctly in your Statement of Stockholders' Equity. Also, please note that the question asks for a Statement of Retained Earnings, not Shareholders' Equity. 5). V. (25 points) The long-time bookkeeper of Madrigal Industries recently retired. The company has not yet replaced them and the owner asked the receptionist to prepare a balance sheet for the company at year end. While the receptionist has no experience in accounting, they did find an old book about accounting to reference. The following balance sheet was prepared. Identify ten suggestions for improvements in the format of the balance sheet. Consider both terminology deficiencies as well as classification inaccuracies. Madrigal Industries, Inc. Balance Sheet For the Year Ended 12/31/22 Assets Fixed AssetsTangible Equipment$110,000 Less: reserve for depreciation (40,000)$ 70,000 Factory supplies22,000 Land and buildings400,000 Less: reserve for depreciation(150,000)250,000 Plant site held for future use 90,000$ 432,000 Current Assets Accounts receivable175,000 Cash80,000 Inventory [See note 1]240,000495,000 Fixed Assets--Intangible Goodwill80,000 Notes receivable 40,000 Patents 26,000 146,000 Deferred Charges Advances to salespersons60,000 Prepaid rent27,000 Returnable containers 75,000 162,000 Total Assets$1,235,000 Liabilities Current Liabilities Accounts payable$140,000 Allowance for doubtful accounts8,000 Unearned revenue35,000 Income taxes payable 42,000 Sales tax payable 17,000$ 242,000 Long-term Liabilities, 5% debenture bonds, due 2028500,000 Reserve for contingencies [See note 2] 150,000 650,000 Total Liabilities 892,000 Equity Capital stock, $10 par value, issued 15,000 shares$150,000 Capital surplus90,000 Dividends paid (20,000) Earned surplus 123,000 Total Equity 343,000 Total Liabilities and Equity$1,235,000 Note 1.The inventory account includes only items physically present at the main plant and warehouse. Items located at the company's branch sales office amounting to $40,000 are excluded since the company has consistently followed this procedure for many years. Note 2.The reserve for contingencies has been created by a debit to earned surplus and has been established to provide a cushion for future uncertainties. The Madrigal Industries receptionist's work on the presented balance sheet exhibits a number of technical and categorization errors. Seven recommendations for improvement are provided below. 1. Inventory: The inventory note indicates that some inventory items are excluded from the balance sheet. However, it is important to include all inventory items on the balance sheet, regardless of their location. 2. Inventory: The inventory note indicates that some inventory items are excluded from the balance sheet. However, it is important to include all inventory items on the balance sheet, regardless of their location. Here's an improved version of the balance sheet incorporating these suggestions: Madrigal Industries, Inc. Balance Sheet As of December 31, 2022 Assets: Liabilities: Current Assets: Current Liabilities: Cash $80,000 Accounts Payable $180,000 Accounts Receivable $175,000 Allowance for Doubtful Accounts $8,000 Inventory $280,000 Unearned Revenue $35,000 Prepaid Rent $27,000 Income Taxes Payable $42,000 Returnable Containers $75,000 Sales Tax Payable $17,000 Advances to salespersons $60,000 Total Current Liabilities $282,000 Total Current Assets $697,000 Long-Term Liabilities: Non-Current Assets: 5% Debenture Bonds, Due 2028: $500,000 Notes Receivable $40,000 Other Liabilities $150,000 Equipment $110,000 Total Long-Term Liabilities $650,000 Less: Reserve for Depreciation ($40,000) Factory Supplies $22,000 Total Liabilities $932,000 Land and Buildings: Land $400,000 Equity: Less: Reserve for Depreciation ($150,000) Capital Stock, $10 Par Value, Issued 15,000 Shares $150,000 Plant Site Held for Future Use $90,000 Capital Surplus $90,000 Goodwill $80,000 Earned Surplus $123,000 Patent $26,000 Dividends Paid ($20,000) Total Non-Current Assets $578,000 Total Equity $343,000 Total Assets: $1,275,000 Total Liabilities and Equity: $1,275,000 My instructor feedback Question 5 is better, but you have still missed some important items. Instead of restating the balance sheet, I recommend providing a list of ten specific recommendations. Please follow instructions in order !! Also read the instructions in order !! Also doing these answers in order !! Also separate the answers so easy to read and understand !! Please Instuctor Feedback before working on this so we avoid wrong answers !!