The following is the December 31, 2022, balance sheet for Newmarket Novelty Goods Inc.

Sales for 2022 were $1,800,000, with the cost of goods sold is 45% of sales. Amortization expense was 10% of the gross plant and equipment at the beginning of the year. Interest expense was 10% on the notes payable and 12% on the bonds payable. Selling, general, and administrative expenses were $170,000 and the firm's tax rate is 30%.

A) Prepare an income statement in the proper format. [Show all the calculations where warranted] [10 marks]

B) If the dividend payout ratio for the company is 35%, what is the value of the retained earnings account on December 31, 2022? [5 marks]

Assets		Liabilities
Cash	$120,000	Accounts payable	$50,000
Accounts receivable	150,000	Notes payable	200,000
Inventory	230,000	Bonds payable	270,000
Total current assets	450,000	Total liabilities	520,000
Plant and equipment	1,300,000
Less: Acc. Amortization	300,000	Common stock	600,000
Net plant and Equipment	1,000,000	Retained earnings	380,000
		Total equity	980,000
Total assets	1,500,000	Total liabilities & equity	$1,500,000