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Question 1 Multi-Step Income Statement and Retained Earnings 20 marks (suggested time 30 minutes) You have been hired by Mandalorian Corporation to prepare year-end financial statements. Mandalorian fired its bookkeeper after discovering he spent more time playing on his phone than actually working. You, a recent grad, are eager to show off the amazing accounting skills you've gained during your time at Medicine Hat College! At December 31, 2021 an analysis of the accounts showed the following: Sales..... $1,200,000 Loss on sale of building (net of $18,000 tax) 42,000 Selling expenses.... 128,000 Cash... 60,000 Accounts receivable. 90,000 Common shares..... 200,000 Accumulated depreciation 180,000 Dividend revenue 18,000 Cost of goods sold 729,000 Inventory 125,000 Unearned service revenue 4,400 Accrued interest payable 1,000 Land. 370,000 Patents... 100.000 Retained earnings, January 1, 2021 270,000 Interest expense 17,000 Cumulative effect of prior year change in depreciation policy (net of $15,000 tax).. 35,000 General and administrative expenses 160,000 Dividends declared 29,000 Allowance for doubtful accounts 5,000 Notes payable (maturity July 1, 2024) 200,000 Machinery and equipment 450,000 Materials and supplies 40,000 Accounts payable.. 60,000 Unless indicated otherwise, you may assume a 30% income tax rate. Required a) Prepare, in good form, a multiple-step income statement

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