Problem 7-21A Multistep income statement and balance sheet LO 7-1, 7-5

Use the following information to prepare a multi-step income statement and a balance sheet for Sherman Equipment Co. for Year 2. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.) (Balance Sheet only: Items to be deducted must be indicated with a minus sign.)

Salaries Expense	$	77,000			Operating Expenses	$	70,000
Common Stock		100,000			Cash Flow from Investing Activities		86,400
Notes Receivable (short term)		32,000			Prepaid Rent		13,300
Allowance for Doubtful Accounts		8,600			Land		48,000
Uncollectible Accounts Expense		8,900			Cash		48,900
Supplies		2,000			Inventory		99,100
Interest Revenue		6,200			Accounts Payable		54,000
Sales Revenue		352,000			Salaries Payable		20,000
Dividends		4,300			Cost of Goods Sold		156,000
Interest Receivable (short term)		2,300			Accounts Receivable		64,000
Beginning Retained Earnings		85,000

SHERMAN EQUIPMENT CO. Income Statement For the Year Ending December 31, Year 2 Operating Expenses 0 0 Non-Operating Items $ 0 SHERMAN EQUIPMENT CO. Balance Sheet As of December 31, Year 2 Assets 0 Total assets $ 0 Liabilities and Stockholders' Equity Current Liabilities $ 0 Total Liabilities Stockholders' Equity 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 0