The following is a pre-closing trial balance for Axo Inc., a manufacturer of metal tubing, as at December 31, 2019:

During the year, the company declared and paid dividends of $300,000, and issued shares for proceeds of $200,000. 

Required:

Prepare, in good form, the following:

a. A multi-step income statement that includes relevant subtotals, with operating expenses listed by their nature, for the year ended December 31, 2019.

b. A statement of changes in equity for the year ended December 31, 2019. 

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Accounts payable Accounts receivable Accumulated depreciation Cash Common shares Depreciation Income from discontinued operations Income tax expense Income tax on income from discontinued operations Interest expense Inventories Long-term debt Plant and equipment Raw materials used Retained earnings Salaries and wages Sales Total Debit $ 1,360,000 69,300 1,475,000 154,200 7,500 355,000 645,000 12,300,000 1,670,000 5,210,000 $23,246,000 Credit $ 525,000 6,555,000 700,000 25,000 5,400,000 817,000 9,224,000 $23,246,000