The following information was taken from the 2015 financial records of Rothrock Consolidated. All items are pretax.

The company’s income tax rate is 35 percent, and the items above are treated identically for financial reporting and tax purposes.
Prepare the following:
a. An income statement.
b. A reconciliation of retainedearnings.

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Credit 87,000 5,200 Debit Operating revenues Operating expenses Gain on sale of short-term investments Loss on sale of business segment Income earned on disposed business segment Extraordinary loss Income due to change in accounting principle Retained earnings (beginning balance) Dividends declared 32,500 21,000 5,000 3,000 12,500 72,000 18,000