Audio Affection, Inc., sells automotive and home stereo equipment. It has 50,000 shares of $100 par common stock outstanding and 10,000 shares of $2, $100 par cumulative preferred stock outstanding as of December 31, 2006. List the errors you find in the following income statement for the year ended December 31,2006.

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Audio Affection, Inc. Income Statement For the Year Ended December 31, 2006 Net sales Cost of merchandise solo Gross profit Operating expenses: $9,450,000 7,100,000 $2,350,000 Selling expenses Administrative expenses $820,000 320,000 Income from continuing operations before income tax Income tax expense Income from continuing operations Cumulative effect on prior years' income (decrease) 1,140,000 $1,210,000 420,000 $ 790,000 of changing to a different depreciation method (net of applicable income tax of $86,000) (204,000) (30,000) Fixed asset impairment Income before condemnation of land, restructuring charge, and discontinued operations 556,000 Extraordinary items: Gain on condemnation of land (net of applicable income tax of $80,000) 120,000 (59,500) (184,000) Restructuring charge (net of applicable income tax of $25,500) Loss on discontinued operations (net of applicable income tax of $76,000) Net income Earnings per common share S 432.500 Income from continuing operations $ 15.80 Cumulative effect on prior years income (decrease) of changing to a different depreciation method Fixed asset impairment Income before extraordinary item and discontinued S 11.12 2.40 (3.68) operations Extraordinary item:s: Gain on condemnation of land Restructuring charge Loss on discontinued operations Net income $ 8.65