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 ltems will not appear on elther statement, and ending retalned earnings must be calculated.) (Balance Sheet only tems to be deducted must be Indicated with a minus sign.) s 75,888 Operating Expenses Salaries Expense Conmon Stock $ 68,808 84,488 13,188 46,808 48,788 98,908 52,808 18,888 154,800 62,808 188,86 Cash Flow from Investing Activities Notes Receivable (short term) Allowance for Doubtful Accounts 38,868 Prepaid Rent 8,400 Land 8,788 Cash 1,888 Inventory 6,888 Accounts Payable Uncollectible Accounts Expense Interest Revenue Sales Revenuse Dividends Interest Receivable (short term) Beginning Retained Earnings 344,868 Salaries Payable 4,188 Cost of Goods Sold 2,188 Accounts Receivable 84,808 Answer is not complete. Income Statement For the Year Year 2 Sales revenue Cost of goods sold Gross profi 344,000 54,000 190,000 Salaries expense 75,000 01 8,700 Uncollectible accounts expense Total Operating Expenses Operating income Non-Operating Items 33,700) 106,300 Interest revenue 6,000 Net income 112,300 3 Answer is not complete. Balance Sheet As of December 31, Year 2 Assets $48,700 Accounts receivable Less: Allowance for doubtful accounts Notes receivable Interest receivable Prepaid rent Supplies 62,000 62,000 30,000 2,100 3,100 1,800 8,000 Total assets 203,700 Liabilities and Stockholders' Equity Current Liabilities Accounts payabla Salaries payable 52,000 18,000 Total Liabilities 5 70,000 Stockholders' Equity Common stock 00,000 84,000 Retained earnings Total Stockholders Equity 84,000 Total Liabilities and Stockholders Equity