Reference no: EM131812469

Presented below is selected information related to the Gator Company for 2017:

Retained earnings beginning balance, unadjusted, January 1, 2017            $575,000

Sales                                                                                                         $4,000,000

Merchandise inventory, LIFO                                                                $375,000

Accounts Receivable, net of the allowance for doubtful accounts    $450,000

Selling and administrative expenses                                                     $400,000

Net loss (pre-tax) from discontinued operations                               $(100,000)

Cash dividends declared but not paid on common stock                   $50,000

Cost of goods sold                                                                                  $950,000

Unrealized holding gain on available-for-sale securities (after-tax) $90,000

Accounts Payable                                                                                   $120,000

Other revenue                                                                                         $80,000

Other expenses                                                                                       $80,000

Sales Allowances                                                                                     $95,000

Assume a 30% tax rate on all items and that 10,000 shares of common stock were outstanding during the year. The available-for-sale securities were purchased in 2017 and none were sold during 2017. All accounts have their normal debit or credit balance.

Required

(A) Prepare a multi-step income statement for the year 2017. Do not prepare a statement of comprehensive income. Be sure to show and label all of your work in a neat and proper format.

(B) Prepare a statement of retained earnings for the year 2017. Be sure to show and label all of your work in a neat and proper format.