income statement and statement of retained earnings

/in /by

Benford Company uses a periodic inventory system and presents the following items derived from its December 31, 2016, adjusted trial balance:

Operating Expenses

$39,380

Dividend Revenue

1,100

Retained Earnings, January 1, 2016

75,570

Sales (net)

153,560

Common Stock, $15 par

49,500

Merchandise Inventory, January 1, 2016

26,400

Purchases (net)

87,120

The following information is also available for 2016 and is not reflected in the preceding accounts:

  1. The common stock has been outstanding for the entire year. A cash dividend of $0.92 per share was declared.
  2. The income tax rate on all items of income is 30%.
  3. The ending merchandise inventory is $30,030.
  4. A pretax $4,400 loss was recognized on the sale of Division E (a component of the company). This division had earned a pretax operating income of $2,090 during 2016.
  5. Damaged inventory was written off at a pretax loss of $7,260.
  6. An earthquake, which is unusual in the area, caused a $4,070 pretax loss.

Required:

  1. Prepare a 2016 single-step income statement for Benford Company.
  2. Prepare a 2016 retained earnings statement for Benford Company.