A company has the following balance sheet as at December 31, 2022:

Assets: Cash $50,000 Accounts Receivable $70,000 Inventory $80,000 Plant and Equipment (net) $200,000

Liabilities: Accounts Payable $30,000 Notes Payable $100,000

Owners' Equity: Common Stock $50,000 Retained Earnings $150,000

The company has just completed its operations for the year and has the following additional information:

• Sales revenue for the year was $400,000.
• Cost of goods sold was $250,000.
• Operating expenses for the year were $75,000.
• Depreciation expense for the year was $40,000.
• The company declared and paid dividends of $20,000.

Required: (a) Prepare an income statement for the year ended December 31, 2022. (5 marks) (b) Prepare a statement of retained earnings for the year ended December 31, 2022. (5 marks)