The trial balance for Damon€™s Fly Fishing Tackle, Inc., dated December 31 of this year, follows. To reduce the number of accounts in the trial balance, Selling Expenses (control) is used in place of all selling expenses. Likewise, General Expenses (control) is used in place of all general expenses.

Additional information is as follows:
a. The charter states that authorized preferred 9 percent stock amounts to 2,000 shares and authorized common stock amounts to 20,000 shares.
b. Merchandise Inventory, December 31 (ending inventory) is $ 592,100.
c. No dividends were declared and paid during the year.

Required
1. Prepare an income statement for the year ended December 31, 20€”.
2. Prepare a statement of retained earnings for the year ended December 31, 20€”.
3. Prepare a classified balancesheet.

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Damon's Fly Fishing Tackle, Inc. Trial Balance December 31, 20- Account Name Cash Notes Receivable Accounts Receivakle Allowance for Doubttul Accounts Merchandise Inventory Prepaid Insurance Equipment Accumulated Depreciation Equipment Patents Accounts Payable Preferred 9 Percent Stock ($100 par) Prefemed 9 Percent Stock Subscribed Paid-in Capital in Excess of Par Value Common Stock ($20 stated value) Paid-in Capital in Excess of Stated Value Retained Eamings Sales Purchases Purchases Discounts Freight In Selling Expenses Genetal Expenses Income Tax Expense Interest Income Debit Credit 40.142 30,000 276,355 5,490 571.423 2.644 173,023 32,834 19,584 149,224 153,000 30,600 6,732 306,000 36,720 159,120 3,605,900 2,630,152 15,920 109,587 405,848 114.444 131,224 3,486 4.505,026 4,505,026