Let’s assume that you are a newly-hired finance manager for NH Corporation, a small but growing manufacturing company of winter hiking socks. On your first day at work, 12/31/2014, CFO tells you that the company has 50K shares of common stock. Also, that same day, you review the company’s accounts with the CFO revealed the following information:

Loss due to magnitude 8 earthquake                         56K

Marketing and sales expenses                                   128K

Cash and cash equivalents                                        60K

Accounts receivable                                                   90K

Common stock                                                           200K

COGS                                                                       701K

Accumulated depreciation                                           180K

Dividend revenues                                                      8K

Unearned service revenue                                         4.4K

Interest payable                                                          1K

Land                                                                            370K

Patents                                                                        100K

Retained earnings, 1/1/2014                                      290K

Interest expense                                                         17K

Administrative expenses                                            170K

Dividends declared                                                     24K

Allowance for doubtful accounts                                5K

Notes payable (matures on July 1, 2017)                  200K

PP&E                                                                          450K

Raw Materials                                                             40K

Accounts payable                                                       60K

Further, you learn from a finance director that the amount of income taxes for ordinary income was $57.6K, not including the tax effect of the earthquake loss of $24K.

Instructions

(a) Please put together an income statement (multistep)

(b) Please put together a retained earnings statement.