The following information was taken from the ledger and other records of Sundem Sales Corporation at June 30, 19X5:

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1. Prepare a single-step income statement, including earnings per share, for Sundem Sales Corporation for the fiscal year ended June 30, 19X5. Evaluate income for the year ended June 30, 19X5, in terms of the outlook for 19X6. Assume that 19X5 was a typical year and that Sundem's managers hoped to earn income from continuing operations equal to 8 percent of net sales.
2. Prepare the statement of retained earnings for the fiscal year ended June 30, 19X5.
3. Prepare the stockholders' equity section of the balance sheet at that date.
4. How will what you learned in this problem help you evaluate an investment?

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General expenses.. Loss on sale of discontinued segment. Prior-period adjustment-debit to Retained Earnings.. $ 71,000 8,000 4,000 Cost of goods sold 319,000 Income tax expense (saving): Continuing operations... 28,000 Discontinued segment: Operating income. 3,600 Loss on sale. (3,200) Extraordinary gain. 10,800 Cumulative effect of change in depreciation method. 3,000 Interest expense. 23,000 Gain on settlement of lawsuit.. 8,000 Sales returns.... 15,000 Paid-in capital from retirement of preferred stock. 16,000 Dividend revenue 11,000 Treasury stock, common (2,000 shares at cost).. 28,000 Sales discounts.. 7,000 Extraordinary gain. Loss on sale of plant assets. Operating income, discontinued segment. Dividends on preferred stock. 27,000 10,000 9,000