Sales Returns & Allowances (150,000) (75,000) Net Sales 1,350,000 1,955,000 Cost of Goods Sold (750,000) (1,500,000) Gross Margin 600,000 455,000 Wages & Salary Expense (50,000) ( (80,000) Utility Expense (10,000) (20,000) Marketing Expense (3,500) Interest Expense (25,000) (40,000) Amortization (7,000) Depreciation (75,000) (100,000) Operating Income 436,500 208,000 Loss on Sale of franchise rights (7,000) Income Tax Expense (45,000) (60,000) Net Income 391,500 141,000 Statement of Retained Earnings for 2019 for 2020 Beg. Retained Earnings 299,000 409,500 Plus Net Income 391,500 141,000 less Dividends Paid (281,000) (340,000) End. Retained Earnings 409,500 210,500 3/3 Sales Returns & Allowances (150,000) (75,000) Net Sales 1,350,000 1,955,000 Cost of Goods Sold (750,000) (1,500,000) Gross Margin 600,000 455,000 Wages & Salary Expense (50,000) ( (80,000) Utility Expense (10,000) (20,000) Marketing Expense (3,500) Interest Expense (25,000) (40,000) Amortization (7,000) Depreciation (75,000) (100,000) Operating Income 436,500 208,000 Loss on Sale of franchise rights (7,000) Income Tax Expense (45,000) (60,000) Net Income 391,500 141,000 Statement of Retained Earnings for 2019 for 2020 Beg. Retained Earnings 299,000 409,500 Plus Net Income 391,500 141,000 less Dividends Paid (281,000) (340,000) End. Retained Earnings 409,500 210,500 3/3