P4-4.

(Multiple- and Single-Step Income, Retained Earnings)

The following account balances were included in the trial balance of Twain Corporation at June 30, 2014.

Sales revenue	$1,578,500	Depreciation expense (office furniture and equipment)	$7,250
Sales discounts	31,150
Cost of goods sold	896,770	Property tax expense	7,320
Salaries and wages expense (sales)	56,260	Bad debt expense (selling)	4,850
Sales commissions	97,600	Maintenance and repairs expense (administration)	9,130
Travel expense (salespersons)	28,930
Delivery expense	21,400	Office expense	6,000
Entertainment expense	14,820	Sales returns and allowances	62,300
Telephone and Internet expense (sales)	9,030	Dividends received	38,000
Depreciation expense (sales equipment)	4,980	Interest expense	18,000
Maintenance and repairs expense (sales)	6,200	Income tax expense	102,000
Miscellaneous selling expenses	4,715	Depreciation understatement due to error2011 (net of tax)	17,700
Office supplies used	3,450
Telephone and Internet expense (administration)	2,820	Dividends declared on preferred stock	9,000
		Dividends declared on common stock	37,000

The Retained Earnings account had a balance of $337,000 at July 1, 2013. There are 80,000 shares of common stock outstanding.

Instructions

(a)	Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014.
(b)	Using the single-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2014.