Preparing a balance sheet and income statement. The accounting records of The GAP, a retail clothing store, reveal the following for a recent year (amounts in thousands):

a. Prepare a comparative balance sheet for The GAP as of January 31, Year 9 and Year 10. Classify each balance sheet item into one of the following categories: current assets, noncurrent assets, current liabilities, noncurrent liabilities, and shareholders' equity.

b. Prepare an income statement for The GAP for the year ended January 31, Year 10. Separate income items into revenues and expenses.

c. Prepare a schedule explaining the change in retained earnings between January 31, Year 9 and January 31, Year 10.

d. Compare the amounts on The GAP's balance sheet on January 31, Year 9 and January 31 , Year 10. Identify the major changes and suggest possible explanations for these changes.

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BALANCE SHEET ITEMS Accounts Payable Cash ... January 31 Year 9 Year 10 $ 684,130 565,253 354,719 $ 805,945 450,352 Common Stock 135,034 Merchandise Inventory Notes Payable to Banks (due within one year) Long-term Debt .... Other Current Assets Other Current Liabilities 1,056,444 1,462,045 90,690 168,961 496,455 784,925 250,127 285,393 778,283 777,973 Other Noncurrent Assets 215,725 275,651 Other Noncurrent Liabilities 340,682 417,907 Property, Plant, and Equipment (net) 1,876,370 2,715,315 Retained Earnings... 1,218,960 2,098,011 INCOME STATEMENT ITEMS Administrative Expenses Cost of Goods Sold Income Tax Expense Interest Expense Sales Revenue Selling Expenses For the Year Ended January 31, Year 10 $ 803,995 6,775,262 657,884 31,755 11,635,398 2,239,437