On December 31, 1990, the end of Griffin Sales, Inc.'s annual accounting period, the financial statement columns of the company's work sheet were as follows:

\section*{Required}
1. Prepare a 1990 classified, multiple-step income statement for the corporation, showing in detail the expenses and the items that make up cost of goods sold.
2. Prepare a 1990 retained earnings statement.
3. Journalize compound closing entries for the corporation.
4. Open a Merchandise Inventory account and enter a December 31, 1989, balance of \(\$ 33,765\). Then post the portions of the closing entries that affect the account.
5. Prepare a combined, single-step income and retained earnings statement. Condense each revenue and expense category into a single item.

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Retained Earnings Statement or Income Statement Balance Sheet Debit Credit Debit Credit Merchandise inventory Other assets. 33,765 35,790 35,790 260,000 Common stock 100,000 Retained earnings 186,070 Dividends declared 25,000 Sales. 330,510 Sales returns and allowances 1,970 Purchases. 216,765 Purchases returns and allowances. 780 Purchases discounts. 3,255 Transportation-in. 1,405 Sales salaries expense. 32,760 Rent expense, selling space 16,200 Advertising expense 1,185 Store supplies expense. 825 Depreciation expense, store equipment 3,175 Office salaries expense. 15,975 Rent expense, office space 1,800 Telephone expense 855 Office supplies expense 325 Insurance expense. 2,160 Depreciation expense, office equipment 795 Income taxes expense 5,655 335,615 370,335 320,790 286,070 Net income 34,720 34,720 370,335 370,335 320,790 320,790