Wealthy Manufacturing Company purchased 30 percent of the voting shares of Diversified Products Corporation on March 23, 20X4. On December 31, 20X8, Wealthy Manufacturing's controller attempted to prepare income statements and retained earnings statements for the two companies using the following summarized 20X8 data: Diversified Net Sales Cost of Goods Sold Other Expenses Dividends Declared & Paid Retained Earnings, 1/1/X8 Wealthy Manufacturing Products $858,000 $413,000 660,000 307,000 99,000 26,000 44,000 435,000 24,000 277,000 Wealthy Manufacturing uses the equity method in accounting for its investment in Diversified Products. The controller was also aware of the following specific transactions for Diversified Products in 20X8, which were not included in the preceding data: 1. Diversified sold its entire Health Technologies division on September 30, 20X8, for $385,000. The book value of Health Technologies division's net assets on that date was $318,000. The division incurred an operating loss of $21,000 in the first nine months of 20X8. 2. During 20X8, Diversified sold one of its delivery trucks after it was involved in an accident and recorded a gain of $15,000. Required: a. Prepare an income statement and retained earnings statement for Diversified Products for 20X8. (Amounts to be deducted and loss amounts should be indicated by a minus sign.) Net sales Cost of goods sold DIVERSIFIED PRODUCTS CORPORATION Income Statement Year Ended December 31, 20X8 Gross profit Other expenses Income from continuing operations of Diversified Products Corporation Income from continuing operations Discontinued operations: DIVERSIFIED PRODUCTS CORPORATION Retained Earnings Statement Year Ended December 31, 20X8 Retained earnings, January 1, 20X8 Add: Net income Less: Dividends declared Retained earnings, December 31, 20X8 FA 0 0 0 0 0 b. Prepare an income statement and retained earnings statement for Wealthy Manufacturing for 20X8. (Amounts to be deducted and loss amounts should be indicated by a minus sign.) WEALTHY MANUFACTURING COMPANY Income Statement Year Ended December 31, 20X8 Income from continuing operations Discontinued operations: WEALTHY MANUFACTURING COMPANY Retained Earninne Statement 0 0 0 0 0