Use the following information to prepare a multi-step income statement and a balance sheet for Sherman Equipment Co. for Year 2. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.) (Balance Sheet only: Items to be deducted must be indicated with a minus sign.) Salaries Expense Common Stock Notes Receivable (short term) Allowance for Doubtful Accounts Uncollectible Accounts Expense Supplies Interest Revenue Sales Revenue Dividends Interest Receivable (short term) Beginning Retained Earnings $ 85,000 Operating Expenses 100,000 Cash Flow from Investing Activities 40,000 Prepaid Rent 9,400 Land 9,700 Cash 2,800 Inventory 7,000 Accounts Payable 384,000 Salaries Payable 5,100 Cost of Goods Sold 3,100 Accounts Receivable 89,000 $ 78,000 94,400 14,100 56,000 49,700 99,900 62,000 28,000 164,000 72,000 SHERMAN EQUIPMENT CO. Income Statement For the Year Ending December 31, Year 2 Operating Expenses Total Operating Expenses Non-Operating Items SHERMAN EQUIPMENT CO. Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities and Stockholders' Equity Current Liabilities Total Liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity