Prepare a multiple-step income statement for Music Warehouse.

Prepare a statement of changes in stockholder's equity for Music Warehouse.

Music Warehouse Adjusted Trial Balance December 31, 2008 Debit Credit Cash $24,675 Accounts Receivable 5,625 Inventory 65,980 Land 93,000 Building 289,000 Accumulated Depreciation 75,000 Notes Payable 85,000 Accounts Payable 53,600 Interest Payable 4,750 Common Stock 10,000 Additional Paid-in Capital 120,000 Dividends 10,000 Retained Earnings 59,980 Sales 937,500 Sales Discounts 22,675 Cost of Goods Sold 723,000 Salaries 81,000 Utilities 8,900 Repairs & Maintenance 5,225 Telephone 2,850 Interest Expense 4,400 Depreciation Expense 9,500 $1,345,830 $1,345,830

The following is additional information needed for financial-statement preparation: Loss as a result of hurricane damage on the building: $17,000 (assume that the building is not located in an area that sustains frequent hurricane damage.) Loss because of the discontinuation of the cassette tape music segment: $26,875 Beginning of the year balance of common stock: $8,000 (assume that changes are related to issuance of common stock.) Beginning of the year balance of additional paid-in capital: $102,000 Effective income tax rate: 35%