Working backward to the income statement Tertia Company presents balance sheets at the beginning and end of 2008 {Exhibit 2.24), as well as a statement of cash receipts and disbursements (Exhibit 2.25). Prepare a combined statement of income and retained earnings for 2008.

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Tortia Company Balance Sheets EXHIBIT 2.24 December 31, 2008 and December 31, 2007 (Problem 44) December 31, 2008 2007 ASSETS $ 67,800 Cash. $ 40,000 Accounts and Notes Receivable. 41,000 36,000 Merchandise Inventory. Interest Receivable.. Prepaid Miscellaneous Services . Building, Machinery, and Equipment Accumulated Depreciation 49,500 55,000 1,000 700 4,000 5,200 47,000 47,000 (10,000) (12,000) $199,200 Total Assets $173,000 LIABILITIES AND SHAREHOLDERS EQUITY $ 2,500 Accounts Payable (miscellaneous services) Accounts Payable (merchandise purchases). Property Taxes Payable Mortgage Payable . $ 2,000 41,000 34,000 1,000 1,500 30,000 $ 75,000 $ 25,000 35,000 S 72,000 S 25,000 Total Liabilities. Common Stock. Retained Earnings.. Total Shareholders Equity. Total Liabilities and Shareholders' Equity 99,200 76,000 $124,200 S101,000 $199,200 S173,000