Prepare the Income Statement (use multiple-step form)

Description of the Task: As the accountant of ABC Trading, you were provided below the trial balance of Domingo Merchandising to help your boss decide whether to proceed or not on his plan to invest on Domingo Merchandising. Based on the knowledge that you have in preparing and analyzing financial statements, you need to prepare the Income Statement to check the company's operating performance; and the Balance Sheet, to determine its financial condition to see how much was the company's working capital and if it has good standing in terms of paying its obligations. You were also tasked to determine the management's ability to controll expenses and to earn a return on the resources committed to the business, how much debt is used to finance operation and its efficiency to create value from the use of assets. In addition, you were provided the bank statement for the month of December and you were tasked to reconcile the cash balance per book and cash balance per bank as an accompanying report supplementing the cash balance reported on the Balance Sheet. Below is the trial balance of Domingo Merchandising as of December 31, 2018. Domingo Merchandising Trial Balance December 31, 2018 Cash 150,150 Accounts Receivable 8,931 Inventory, January 1 25,038 Prepaid Insurance 2,808 Equipment 53,040 Accumulated Depreciation - Equipment 15,912 Accounts Payable 21,973 Domingo, Capital, Jan 1, 2018 182,536 Domingo, Drawing 2,340 Sales 113,344 Sales Discounts 5,538 Sales Returns and Allowances 4,134 Purchases 56,600 Purchase Discounts 1,061 Purchase Returns and Allowances 1,716 Transportation in 1,474 Rent Expense 4,056 Salary Expense 19,890 Utilities Expense 2,543 Totals 336,542 336,542 A physical inventory taken at the close of business on December 31, 2018, showed inventory on hand of 28,470. Total assets at the beginning of the year was 221,000. Below is the bank statement taken from Pilipinas Bank. Pilipinas Bank Bank Statement As of December 31, 2018 Check No. Withdrawal Deposit Balance Beg. Bal. 100,000 104 10,000 90,000 101 5,000 85,000 106 25,000 60,000 50,000 110,000 10,000 120,000 103 40,000 80,000 62,400 142,400 105 2,000 140,400 Additional Information: There was a check deposited beyond the bank cut-off time on the last banking day during the month amounting to P12,350. Check number 102 amounted to P2,600 was not yet presented to the bank for encashment. There are no reconciling items on the cash balance per book