TIDAL CORP. has the following account balances and additional information at December 31, 2020. The company is a private corporation and follows ASPE:

Machinery$ 1,540,000

Accounts receivable................................................................................................. 102,000

Accrued interest payable.............................................................................................. 1,000

Investment Income....................................................................................................... 9,000

Sales......................................................................................................................... 800,000

Accounts payable........................................................................................................ 30,000

Loss from Flood (net of $7,000 tax)............................................................................... 21,000

Selling expenses......................................................................................................... 64,000

Common shares (40,000 issued; no change during 2020)...................................... 200,000

Accumulated depreciation.......................................................................................... 90,000

Long-term note payable (due Oct 1, 2024).............................................................. 100,000

Inventory, Jan 1, 2020................................................................................................ 76,000

Inventory, Dec 31, 2020.............................................................................................. 62,500

Supplies inventory...................................................................................................... 40,000

Unearned service revenue........................................................................................... 3,000

Land.......................................................................................................................... 370,000

Cash............................................................................................................................ 60,000

FV-NI Investments (at fair value).............................................................................. 100,000

Retained earnings, Jan 1, 2020................................................................................ 135,000

Interest expense........................................................................................................... 8,500

Correction of an error from a prior period (net of $6,000 tax)................................. (18,000)

General and administrative expenses........................................................................ 80,000

Dividends declared and not paid................................................................................ 15,000

Allowance for doubtful accounts................................................................................... 5,000

Vehicles ........................................................................................ 225,000

Cost of Goods Sold. 364,500

Unless indicated otherwise, you may assume a 20% income tax rate.

General and administrative expenses include depreciation.

Instructions

a. Prepare, in good form, a multiple-step income statement.

b. Prepare, in good form, a retained earnings statement.