Reference no: EM132075109

Question - The following pretax amounts pertain to the Evans Corp. for the year ended December 31, 2015.

Sales $400,000

Operating expenses 84,000

Interest expense 4,000

Cost of goods sold 280,000

Gain on sale of equipment 10,000

Prior period adjustment (16,000)

Gain on disposal of business component              40,000

Retained earnings, January 1, 2015 1,600,000

Dividends declared 12,000

The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year.

(1) Prepare a multiple-step income statement in good form for the year ended December 31, 2015.

(2) Prepare a retained earnings statement in good form for the year ended December 31, 2015.