Reference no: EM132637418

Question - The following income statement was prepared by a new and inexperienced employee in the accounting department of Phoenix, Inc., a business organized as a corporation.

PHOENIX, INC.INCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2018Net sales $10,800,000

Gain on sale of treasury stock 62,000

Excess of issuance price over par value of capital stock 510,000

Prior period adjustment (net of income tax) 96,000

Total revenue $11,468,000

Less:

Cost of goods sold$6,000,000

Selling expenses 1,104,000

General and administrative expenses 1,896,000

Loss from settlement of litigation 24,000

Income tax on continuing operations 720,000

Operating loss on discontinued operations (net of income tax benefit) 252,000

Loss on disposal of discontinued operations (net of income tax benefit) 420,000

Dividends declared on common stock 350,000

Total costs and expenses 10,766,000

Net income $702,000

Required - Prepare a statement of retained earnings for 2018.