Martinez Company recently hired a new accountant whose first task was to prepare the financial statements for the year ended December 31, 2024. The following is what he produced: Sales Less: Unearned revenue Purchase discounts Total revenue MARTINEZ COMPANY Income Statement December 31, 2024 $395,000 $5,400 3,500 8,900 386,100 Cost of goods sold Purchases 232,500 Less: Purchase returns and allowances 3,900 Net purchases 236,400 Add: Sales returns and allowances 7,400 Cost of goods available for sale 243,800 Add: Delivery expense 9,400 Cost of selling merchandise 253,200 Gross profit margin 132,900 Operating expenses Freight in 4,500 Insurance expense 10,500 Interest expense 2,400 Rent expense 18,100 Salaries expense 42,100 Total operating expenses 77,600 55,300 Profit margin Other revenues Interest revenue $1,600 Investment by owner 3,600 5,200 Investment by owner 3,600 5,200 Other expenses Depreciation expense 7,000 Drawings by owner 47,500 54,500 (49,300) Profit from operations $6,000 MARTINEZ COMPANY Balance Sheet Year Ended December 31, 2024 Assets Cash $16,500 Accounts receivable 7,800 Merchandise inventory, January 1, 2024 30,200 Merchandise inventory, December 31, 2024 24,500 Equipment $70,000 Less: loan payable (for equipment purchase) 49,100 20,900 Total assets $99,900 Liabilities and Owner's Equity Long-term investment $49,100 Accumulated depreciation-equipment 21,000 Sales discounts 2,900 Total liabilities 73,000 Owner's equity Total liabilities and owner's equity 26,900 $99,900 The owner of the company, Lily Anderson, is confused by the statements and has asked you for your help. She doesn't understand how, if her Owner's Capital account was $74,800 at December 31, 2023, owner's equity is now only $26,900. The accountant tells you that $26,900 must be correct because the balance sheet is balanced. The accountant also tells you that he didn't prepare a statement of owner's equity because it is an optional statement. You are relieved to find out that, even though there are errors in the statements, the amounts used from the accounts in the general ledger are the correct amounts. Prepare the correct multiple-step income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Less : Sales Discounts Sales Returns and Allowances Net Sales Cost of Goods Sold Inventory, January 1, 2024 Purchases Less Purchase Discounts > Purchase Returns and Allowances Net Purchases Freight In Goods Available For Sale Inventory December 31 2024 10 MARTINEZ COMPANY Income Statement Year Ended December 31, 2024 3500 3900 69 69 232500 7400 225100 4500 Net Purchases Freight In Goods Available For Sale Inventory, December 31, 2024 Cost of Goods Sold Gross Profit Operating Expenses Delivery Expense Insurance Expense Rent Expense Salaries Expense Depreciation Expense Total Operating Expenses Profit from Operations > > > > > > > > > > > > > > Other Revenues and Expenses Interest Revenue Insurance Expense Total Other Revenues and Expenses Profit/(Loss) for the Year 7400 225100 4500 Prepare the correct statement of owner's equity. (List items that increase owner's equity first.) MARTINEZ COMPANY Statement of Owner's Equity Prepare the correct classified balance sheet. You determine that $4,800 of the loan payable on the equipment must be paid during 2025. (List Current Assets in order of liquidity.) MARTINEZ COMPANY Balance Sheet Assets SA Liabilities and Owner's Equity $ Liabilities and Owner's Equity $ $