Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Company for Year 2. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.)

Salaries expense	$71,000	Operating expenses	$64,000
Common stock	100,000	Cash Flow from investing activities	80,400
Notes receivable (short term)	26,000	Prepaid rent	12,700
Allowance for doubtful accounts	8,000	Land	42,000
Uncollectible accounts expense	8,300	Cash	48,300
Supplies	1,400	Inventory	98,500
Interest revenue	5,600	Accounts payable	48,000
Sales revenue	328,000	Salaries payable	14,000
Dividends	3,700	Cost of goods sold	150,000
Interest receivable (short term)	1,700	Accounts receivable	58,000
Beginning retained earnings