The adjusted trial balance of Terris Inc. for the year ended September 30, 2019 is as shown below. It is prior to recording of income tax expense. All accounts are their normal balance (debit or credit). Terris has an income tax rate of 30%.

Accounts payable............................................................................................................... $ 80,000

Accounts receivable............................................................................................................. 40,000

Cash.................................................................................................................................... 50,000

Cash dividends declared........................................................................................................ 7,000

Common shares.................................................................................................................... 30,000

Cost of goods sold.............................................................................................................. 175,000

Dividends payable................................................................................................................. 4,000

Interest expense.................................................................................................................... 4,500

Inventory............................................................................................................................ 120,000

Operating expenses............................................................................................................... 92,300

Preferred shares.................................................................................................................... 25,000

Retained earnings, beginning balance................................................................................. 11,900

Sales revenue..................................................................................................................... 320,000

Taxes payable.......................................................................................................................... 100

Instructions:

Prepare the income statement and statement of retained earnings for Terris Inc. for the year ended September 30, 2019.