Laidig Industries has prepared the following unadjusted trial balance as of December 31, 2021:

ADDITIONAL INFORMATION:

1. A physical count of inventory on December 31, 2021, indicated that the company had $480,000 of inventory on hand.
2. An aging of accounts receivable indicates that $75,000 is uncollectible.
3. The company uses straight-line depreciation. The assets have a ten-year life and zero salvage value.
4. The company used a third of the remaining insurance policy during 2021.
5. The company pays interest for its bond payable on December 31 of every year. The coupon rate and the effective rate are both 10 percent per year.
6. The company's tax rate is 25 percent. All income tax charges are recorded at the end of the year.
7. 200,000 shares of common stock were outstanding during 2021.

INSTRUCTIONS:
Prepare the following:
a. The necessary adjusting and closing entries on December 31, 2021.
b. An income statement including recommended earnings-per-share disclosures.
c. A reconciliation of retained earnings.

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Debit Credit Cash $110,000 Accounts receivable 340,000 Allowance for doubtful accounts $ 50,000 Inventory (balance 1/1/21) 467,000 Prepaid insurance 60,000 Equipment 850,000 Accumulated depreciation 287,000 Accounts payable 200,000 Dividends payable 45,000 Bonds payable 500,000 Common stock 100,000 Retained earnings 673,000 Sales 1,256,000 Gain on disposal of plant assets 76,000 Loss on accounting change 95,000 Purchases 750,000 Selling and administrative expenses 355,000 Interest expense 25,000 Dividends 135,000