ee revenue In Mortgage payable Supplies expense Rent expense Salaries and wages expense Instructions Classify each of the above accounts as an asset (A), liability (L), stockholders' equity revenue (R), or expense (E) item. E1-4 This information relates to Benser Co. for the year 2017 SE) Retained earnings, January 1, 2017$67,000 Advertising expense Dividends Rent expense Service revenue Utilities expense Salaries and wages expense Prepare income statem retained earnings state LO 3), AP 1,800 6,000 10,400 58,000 2,400 30,000 Instructions After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2017 information was taken from the 2017 financial statements of Prepare income stat pharmaceutical giant Merck and Co. (All dollar amounts are in millions.) retained earnings st LO 3),AP Retained earnings, January 1, 2017 Cost of goods sold Selling and administrative expenses Dividends Sales revenue Research and development expense Income tax expense $43,698.8 9,018.9 8,543.2 3,597.7 38,576.0 5,845.0 2,267.6 Instructions (a) After analyzing the data, prepare an income statement and a retained earnings state- ment for the year ending December 31, 2017 Suppose that Merck decided to reduce its research and development expense by 50%. What would be the short-term implications? What would be the long-term implica- tions? How do you think the stock market would react? (b) a retain E1-6 Presented here is information for Zheng Inc. for 2017. Retained earnings, January 1 Service revenue Total expenses Dividends $130,000 400,000 175,000 65,000 (LO 3), AP Instructions Prepare the 2017 retained earnings statement for Zheng Inc. E1-7 Consider each of the following independent situations. (a) The retained earnings statement of Lee Corporation shows dividends of $68,000, Interpret fina (L0 3),AP while net income for the year was $75,000. ating activities was $10,000, cash used in investing activities was $110,000, and cash provided by financing activities was $130,000. (b) The statement of cash flows for Steele Corporation shows that cash provided by oper-