FINANCIAL STATEMENT PROJECT #3 610 Below is the trial balance of Mars Company on December 31, 2019. The accounts are listed in alphabetical order and all accounts have normal balances. Account Title: Balance: Account Title: Balance: Accounts Payable 4,760 Land 11,200 Accounts Receivable 5,250 Long-Term Notes Payable 7,500 Accum. Depr. - Bldngs. 21,600 Merchandise Inventory 7,430 Accum. Depr. - Equip. 10,200 Miscellaneous Revenues 780 Administrative Expenses 5,540 Prepaid Insurance 1,450 Buildings 36,000 Retained Earnings 16,300 Cash 11,680 Salaries Payable Common Stock 25,000 Sales 44,200 Cost of Goods Sold 20,600 Sales Discounts 1,120 Dividends Declared 1,500 Sales Returns & Allowances 2,160 Equipment 18,800 Selling Expenses 6,800 Interest Expense 750 Supplies 820 Interest Payable 150 REQUIRED: Prepare the financial statements for the year for Mars Company a multi-step income statement, a statement of retained earnings and a classified balance sheet. What is different for this project compared to Project #2? 1. New Accounts: Sales Revenue Sales Returns and Allowances and Sales Discounts--these are contra account To the Sales Revenue account. Cost of Goods Sold Expense Note that all of our operating expense accounts like depreciation, utilities, salaries, rent, insurance, supplies, ete, have been summarized into just two account Selling and Administrative. Merchandise Inventory Multi-Step Income Statement: The multi-step income statement distinguishes between the income from the primary business purposes (we assume that the only primary business purpose is merchandising) and the net income from secondary business purposes. The mult-step income statement shows the computation of the gross profit. The multi-step income statement segregates all of the operating expense accounts into two categories: selling and administrative (note, as mentioned above all of the operating expenses have been consolidated into two accounts). Use the financial statements included in the Chapter 5 Example problem as a guideline