Problem 7-21A Multistep income statement and balance sheet LO 7-1, 7-5 Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Co. for year 2. (Hint. Some of the items will not appear on either statement, and ending retained earnings must be calculated.) (Balance Sheet only: Items to be deducted must be indicated with a minus sign.) Salaries Expense Common Stock Notes Receivable (short term) Allowance for Doubtful Accounts Uncollectible Accounts Expense Supplies Interest Revenue Sales Revenue Dividends Interest Receivable (short term) Beginning Retained Earnings $ 69,000 Operating Expenses 100,000 Cash Flow from Investing Activities 24,000 Prepaid Rent 7,800 Land 8,100 Cash 1,200 Inventory 5,400 Accounts Payable 320,000 Salaries Payable 3,500 Cost of Goods Sold 1,500 Accounts Receivable 81,000 $ 62,000 78,400 12,500 40,000 48,100 98,300 46,000 12,000 148,000 56,000 SHERMAN EQUIPMENT CO. Income Statement For the Year Ending December 31, Year 2 Operating Expenses Non-Operating Items SHERMAN EQUIPMENT CO. Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities and Stockholders' Equity Current Liabilities Total Liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity