Based on the account balances provided, prepare a multi-step income

NEWCO’s adjusted account balances as of December 31, 2015 are shown below (some noted balances are Jan. 1, 2015):

    Sales . . . . . . . . . . . . . . . . . . . . . . . .1,200,000
    Purchases . . . . . . . . . . . . . . . . . .  . .  810,000
    Marketable securities . . . . . . . .. . . . .   15,000
    Purchase discounts  . . . . .. . . . . . . . .   20,000
    Purchase returns and allowances. . . .    2,000
    Selling expenses  . . . . . . . . . . . . . . .  114,000
    Cash  . . . . . . . . . . . . . . . . . . . . . . . . .   147,000
    Accounts receivable . . .  . . . . . . . . . .   60,000
    Common stock  . . .  . . . . . . . . . . . . .  150,000
    Accumulated depreciation   . . . . . . . .   42,000
    Paid-in-capital in excess of par    . . . .   30,000
    Inventory, January 1, 2015  . . . . . . . .  149,000
    Inventory, December 31, 2015. . . . . .  120,000
    Accounts payable   . . . . . . . . . . . . . . .   71,000
    Salaries payable  . . . . . . . . . . . . . . . . .    5,000
    Patents . . . . . . . . . . . . . . . . . . . . . . . . .  18,000
    Retained earnings, January 1, 2015. . .   60,600
    Interest expense  . . . . . . . . . . . . . . . . . . 13,000
    General and administrative expenses. . 160,000
    Dividend revenue. . . . . . . . . . . . . . . . . .    6,000
    Allowance for doubtful accounts . . . . .     3,000
    Notes payable (maturity 7/1/2016) . . . . 105,000
    Machinery and equipment . . . . . . . . . .  150,000
    Income tax expense  . . . . . . . . . . . . . .    30,600
    Treasury stock  . . . . . . . . . . . . . . . . . . .   10,000
    Dividends declared and paid . . . . . . . . .  18,000

Based on the account balances provided, prepare a multi-step income statement and a classified balance sheet. Note: A “multi-step” income statement is one that shows Net Sales, Cost of Goods Sold, Gross Profit, Total Operating Expenses, Net gain/loss from other activities (if applicable), Income before taxes, Income tax expense, and Net Income.

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