Browning Company has the following ledger accounts and adjusted balances as of December 31, 2017. All accounts have normal balances. Brownings income tax rate is 40%. Browning has 300,000 shares of Common Stock authorized and 100,000 shares of Common Stock issued and outstanding.

Accounts Payable. 26,000

Accounts Receivable 180,000

Accumulated Depreciation-Building 50,000

Administrative Expenses. 40,000

Allowance for Doubtful Accounts 20,000

Mortgage Payable ... 250,000*

Building 500,000

Cash. 26,000

Common Stock 300,000

Cost of Goods Sold. 380,000

Dividends 20,000

Income from Operations of Division X.. 40,000

(Division X is a component of Browning Company)

Interest Revenue.. 20,000

Inventory...280,000

Land (held for future use).... 200,000

Loss from Sale of Division X........................... 80,000

(Division X is a component of Browning Company)

Loss on Sale of Investments... .. 10,000

Paid-In Capital in Excess of Par...116,000

Patent 30,000

Prepaid Insurance. 10,000**

Retained Earnings, January 1, 2017 250,000

Sales Discounts. 20,000

Sales Revenue..990,000

Selling Expenses. 130,000

*$25,000 of the principal comes due in 2018.

**Two years insurance paid in advance.

Instructions:

Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.