Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Co. for Year 2.

Salaries Expense ..............................................$ 69,000 

Operating Expenses ........................................$ 62,000
Common Stock .................................................100,000 

Cash Flow from Investing Activities ...............78,400
Notes Receivable (short term) .......................24,000 

Prepaid Rent ............................... ....................12,500
Allowance for Doubtful Accounts ...................7,800 

Land ............................... .................................40,000
Uncollectible Accounts Expense ....................8,100 

Cash ............................... ................................48,100
Supplies ............................... ............................1,200 

Inventory ............................... ........................98,300
Interest Revenue ............................... .............5,400 

Accounts Payable ............................... .........46,000
Sales Revenue ............................... .............320,000 

Salaries Payable ............................... ............12,000
Dividends ............................... .......................3,500 

Cost of Goods Sold ............................... ....148,000
Interest Receivable (short term) ..................1,500 

Accounts Receivable ............................... ...56,000
Beginning Retained Earnings .................... 81,000