BUDDY CORPORATION ADJUSTED TRIAL BALANCE DECEMBER 31, 2020ADDITIONAL INFORMATION: 1. The company performed a year end physical count of its inventory as at December 31, 2020. The amount of inventory on hand at December 31, 2020 amounted to $415,700. Inventory is maintained on a PERIODIC basis. 2. Assume that the tax rate was 30%. All accounts on the Trial Balance are before tax. 3. The amount of common stock outstanding on January 1, 2020 was 50,000 In 2020, common stock was issued as follows: on April 1: 20,000 common shares were issued and on September 1: 30,000 common shares were issued. 4. An error was discovered in the company's 2019 financial statements. Depreciation Expense in 2019 was understated by $35,000. REQUIRED: 1. a detailed multi-step income statement (including EPS presentation) for the year ended December 31, 2020. Show calculations for EPS (for continuing and discontinued sections) Show details of COST OF GOODS SOLD and OPERATING EXPENSES sections. 2. a Statement of Retained Earnings for the year ended December 31, 2020.

ACCOUNTS DEBIT CREDIT CASH 24,868 425,905 ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUNTS INVENTORY (at January 1, 2020) 3,450 OFFICE BUILDING ACCUMULATED DEPRECIATION (OFFICE BUILDING) LAND ACCOUNTS PAYABLE PREFERRED STOCK COMMON STOCK, 100,000 number o RETAINED EARNINGS, at January 1,2 SALES REVENUE SALES DISCOUNTS SALES RETURNS AND ALLOWANCES 425,905 412,812 PURCHASES TRANSPORTATION - IN 10,57151,3592,600,82425,235211,59940,95516,45625,67334,7786,232 SALARIES EXPENSE RENT EXPENSE INSURANCE EXPENSE LOSS DUE TO FIRE 600,00070,600289,423280,000298,757100,000113,8663,491,148 GAIN ON SALE OF EQUIPMENT from Continuing Operations ADVERTISING EXPENSE ADDITIONAL INFORMATION: 1. The company performed a year end physical count of its inventory as at December 31, 2020. The amount of inventory on hand at December 31, 2020 amounted to $415,700. Inventory is maintained on a PERIODIC basis. 2. Assume that the tax rate was 30%. All accounts on the Trial Balance are before tax. 3. The amount of common stock outstanding on January 1, 2020 was 50,000