This exercise should be worked only in connection with exercise E1-21. Refer to the data of Torrance Associates Inc. in E1-21.

Data from E1-21,

Property and equipment, net...................... $ 4 Total revenue....................................... $ 35

Investment................................................... 72 Receivables.......................................... 253

Long-term liabilities.................................... 73 Current liabilities................................. 290

Other expenses............................................ 14 Common shares..................................... 12

Cash............................................................ 28 Interest expense........................................ 3

Retained earnings, beginning...................... 19 Salary and other employee expense........ 9

Retained earnings, ending........................... ? Other assets............................................... 43

Requirements

1. Prepare the income statement of Torrance Associates Inc. for the year ended December 31, 2017.

2. What amount of dividends did Torrance declare during the year ended December 31, 2017?