The following account balances were included in the trial balance of Twain Corporation at June 30, 2015.

Sales revenue $1,578,500 Depreciation expense (offi ce furniture Sales discounts 31,150 and equipment) $ 7,250 Cost of goods sold 896,770 Property tax expense 7,320 Salaries and wages expense (sales) 56,260 Bad debt expense (selling) 4,850 Sales commissions 97,600 Maintenance and repairs expense Travel expense (salespersons) 28,930 (administration) 9,130 Delivery expense 21,400 Offi ce expenses 6,000 Entertainment expense 14,820 Sales returns and allowances 62,300 Telephone and Internet expense Dividend revenue 38,000

(sales) 9,030 Interest expense 18,000 Depreciation expense (sales Income tax expense 102,000 equipment) 4,980 Depreciation understatement Maintenance and repairs expense (sales) 6,200 due to error—2013 17,700 Miscellaneous selling expenses 4,715 Dividends declared on Supplies expense 3,450 preference shares 9,000 Telephone and Internet expense Dividends declared on

(administration) 2,820 ordinary shares 37,000 The Retained Earnings account had a balance of $337,000 at July 1, 2014. There are 80,000 ordinary shares outstanding.

Instructions Prepare an income statement and a retained earnings statement for the year ended June 30, 2015.