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	$72,000	Operating expenses	$65,000
Common stock	100,000	Cash Flow from investing activities	81,400
Notes receivable (short term)	27,000	Prepaid rent	12,800
Allowance for doubtful accounts	8,100	Land	43,000
Uncollectible accounts expense	8,400	Cash	48,400
Supplies	1,500	Inventory	98,600
Interest revenue	5,700	Accounts payable	49,000
Sales revenue	332,000	Salaries payable	15,000
Dividends	3,800	Cost of goods sold	151,000
Interest receivable (short term)	1,800	Accounts receivable	59,000
Beginning retained earnings	82,500

a. Prepare a multistep income statement for Sherman Equipment Company for Year 2.

b. Prepare a balance sheet for Sherman Equipment Company for Year 2.