Question 1

Problem 1 & 2: Income Statement and Statement of Retained Earnings

The following account balances were taken from the trial balance of The Rookery, Inc. on December 31, 2021. The Retained Earning account had a balance of $468,000 on January 1, 2021. There are 150,000 shares of common stock outstanding.

Prepare income statement (multi-step) and a retained earnings statement for the year ended December 31, 2021.

Sales revenue	2,100,500		Telephone and internet expense (admin)	4,900
Sales discounts	12,680		Depreciation expense (office furn & equip)	8,680
Cost of goods sold	1,490,300		Property tax expense	12,900
Salaries and wages expense (sales)	54,600		Bad debt expense (selling)	8,630
Sales commissions	135,800		Maintenance & repairs expense (admin)	4,860
Travel expense (salespersons)	41,600		Office expense	7,500
Freight-out	31,800		Sales returns and allowances	36,870
Entertainment expense	21,930		Dividends received	21,000
Telephone and internet expense (sales)	11,300		Interest expense	37,500
Depreciation expense (sales equipment)	3,500		Income tax expense	68,000
Maintenance and repairs expense (sales)	2,900		Depreciation overstatement due to error (2020, net of tax)	31,000
Miscellaneous expenses (sales)	6,570		Dividends declared on preferred stock	15,000
Office supplies used	2,900		Dividends declared on common stock	45,000