Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2021. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the normal balance for that account. (Hint: The normal balance is the same as the debit or credit side that increases the account.)

Accounts payable $12,750 Accounts receivable 2,600 Accumulated depreciation: office equipment 12,000 Additional paid-in capital (common stock) 13,000 Bonds payable (due December 31, 2024) 22,500 Cash 19,200 Common stock (1,800 shares, $10 par value) 18,000 Cost of goods sold 100,575 Deferred income taxes 5,750 Depreciation expense: office equipment 2,750 Dividends declared 5,000 Income tax expense 8,190 Insurance expense 900 Land 39,500 Merchandise inventory 17,500 Notes payable (due December 31, 2022) 2,500 Office equipment 41,000 Office supplies 900 Office supplies expense 520 Preferred stock (250 shares, $20 par value) 5,000 Premium on bonds payable 1,750 Prepaid rent 1,800 Rent expense 6,100 Retained earnings (January 2021) 21,050 Salaries expense 88,095 Sales 226,000 Sales returns and allowances 2,500 Sales taxes payable 3,200 Treasury stock (200 common shares at cost) 2,250 Utilities expense 4,120 Instructions

A) Prepare an income statement for the year ended December 31, 2021, which includes amounts for gross profit, income before income taxes, and net income. List expenses (other than cost of goods sold and income tax expense) in order, from the largest to the smallest dollar balance. You may ignore earnings per share.