Porter Corporation's capital structure consists of 50,000 shares of common stock. At December 31, 2014 an analysis of the accounts and discussions with company officials revealed the following information: Sales revenue $1,200,000 Earthquake loss (BEFO

Porter Corporation's capital structure consists of 50,000 shares of common stock. At December 31, 2014 an analysis of the accounts and discussions with company officials revealed the following information:

            Sales revenue                                                                                                 $1,200,000

            Earthquake loss (BEFORE TAX) (extraordinary item)                                         56,000

            Selling expenses                                                                                                  128,000

            Cash                                                                                                                       60,000

            Accounts receivable                                                                                              90,000

            Common stock                                                                                                    200,000

            Cost of goods sold                                                                                               701,000

            Accumulated depreciation-machinery                                                                180,000

            Dividend revenue                                                                                                     8,000

            Unearned service revenue                                                                                      4,400

            Interest payable                                                                                                       1,000

            Land                                                                                                                     370,000

            Patents                                                                                                                 100,000

            Retained earnings, January 1, 2014                                                                    290,000

            Interest expense                                                                                                    17,000

            Administrative expenses                                                                                      170,000

            Dividends declared                                                                                                24,000

            Allowance for doubtful accounts                                                                             5,000

            Notes payable (maturity 7/1/17)                                                                          200,000

            Machinery                                                                                                            450,000

            Materials                                                                                                                40,000

            Accounts payable                                                                                                  60,000

The amount of income taxes applicable to ordinary income was $57,600, excluding the tax effect of the earthquake loss which amounted to $24,000.

Instructions

(a)  Prepare a multiple-step income statement.

(b)  Prepare a retained earnings statement.