Smith Co, a retail supermarket, is preparing financial statements for their December 31, 20X7 fiscal year end. Smith asks you, their accountant, to help compile the Statement of Financial Performance. They also are puzzled about the calculation of Retained Earnings and OCI.

Smith has calculated Operating Income as $560,000, but the remaining items have still to be categorized. Compile (in good form) the Statement of Financial Performance starting at Operating Income given the following information:

(1) Smith sold their convenience store chain during the year at a (before tax) gain of $25,000. Income from the convenience stores during 20X7 was $98,000 (before tax).

(2) Smith sold assets during the year. FV-NI investments were sold for $10,000 less than their holding amount. FV-OCI investments were sold for a current year gain of $13,000 (selling price was $96,000 and original cost in 20X1 was $65,000). Two pieces of PPE were sold during the year: a piece of equipment was sold for $55,000 (note: equipment was revalued in 20X6 at $61,000. Previous OCI gains/losses on the equipment were $15,000); and a truck was sold for $10,000 (cost method used with book value before sale of $3,000). The non-recycling method is appropriate for all gains/losses through OCI.

(3) Smith recorded dividend income of $10,000 and declared dividends of $35,000.

(4) Smith holds another investment in shares which is classified as FV-OCI. This investment has decreased in value by $5,000 during 20X7.

(5) Smith consolidated its financial statements and has foreign exchange losses of $40,000.

Smith is taxed at 25%.

Required:

(a) Prepare Smith's Statement of Financial Performance starting from Operating Income

(b) Calculate Smith's post-closing Retained Earnings and AOCI at Dec 31, 20X7 (Beginning balances: RE $692,000; AOCI $65,000).