The following account balances were included in the trial balance of J.R. Reid Corporation at June 30, 2008.

The Retained Earnings account had a balance of $337,000 at July 1, 2007. 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, 2008.

(b) Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2008.

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Sales $1,678,500 Depreciation of office furniture and equipment Sales discounts 31,150 $ 7,250 Cost of goods sold Sales salaries 896,770 Real estate and other local taxes 7,320 Bad debt expense-selling Building expense-prorated 56,260 4,850 Sales commissions 97,600 28,930 Travel expense-salespersons Freight-out Entertainment expense Telephone and Internet expense-sales Depreciation of sales equipment Building expense-prorated to sales Miscellaneous selling expenses to administration 9,130 21,400 Miscellaneous office expenses 6,000 14,820 Sales returns 62,300 9,030 Dividends received 38,000 4,980 Bond interest expense 18,000 6,200 Income taxes 133,000 4,715 Depreciation understatement due to error-2005 (net of tax) Office supplies used Telephone and Internet expense- 3,450 17,700 Dividends declared on administration 2,820 preferred stock 9,000 Dividends declared on common stock 32,000