Problem I. $(48$ Points$).$ Presented below is information related to Cheselka Industries:

Retained earnings, December $31,2025$ Sales revenue

Selling and administrative expenses Discontinued operations loss $($pre$-$tax$)$

Cash dividends declared on common stock

$$650,000$

$1,600,000$

$290,000$

$290,000$

Cost of goods sold

Increase resulting from computation error on depreciation charge in $2024($pretax$)880,000520,000$ Other revenues Other expenses $120,000100,000$

Instructions

Prepare a multiple$-$step income statement for the year $2026.$ Assume a $20\%$ tax rate and that $80,000$ shares of common stock were outstanding during the year.

Prepare a retained earnings statement for the year $2026.$

Be sure and use a proper heading on each statement. Write your answers on the separate sheets. Cheselka Industries $2026$