mcgrath co on june 30 2011 reported a retained earnings 248542

McGrath Co. on June 30, 2011, reported a retained earnings balance of $1,475,000 before closing the books. The books of the company showed the following account balances on June 30, 2011:

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,870,000

Inventory: July 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000

June 30, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000

Sales Returns and Allowances . . . . . . . . . . . . . . . . . . . . . . . . 120,000

Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,542,000

Purchase Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000

Dividends Declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000

Selling and General Expenses . . . . . . . . . . . . . . . . . . . . . . . . 283,000

Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,000

Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,900

Instructions:

Prepare a multiple-step income statement and a retained earnings statement. McGrath Co. has 275,000 shares of common stock outstanding.

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