Problem 9 (20 Points)

The following items are taken from the financial statements of Grove Company for 2020:

Accounts payable $18,500

Accounts receivable 8,000

Accumulated depreciation-equipment 4,800

Bonds payable 18,000

Cash 24,000

Common stock 25,000

Cost of goods sold 27,000

Depreciation expense 4,800

Dividends 5,300

Equipment 44,000

Interest expense 2,500

Patents 7,500

Retained earnings, January 1 20,000

Salaries and wages expense 5,200

Sales revenue 50,500

Supplies 4,500

Instructions

(a) Prepare an income statement and a retained earnings statement for Grove Company.