The following information was taken from the ledger and other records of Kahama, Inc., at September 30, 19X6.

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1. Prepare a single-step income statement, including earnings per share, for Kahama, Inc., for the fiscal year ended September 30, 19X6. Evaluate income for the year ended September 30, 19X6, in terms of the outlook for 19X7. Assume that 19X6 was a typical year and that Kahama managers hoped to earn income from continuing operations equal to 10 percent of net sales.
2. Prepare the statement of retained earnings for the year ended September 30, 19X6.
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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Cost of goods sold......... Cumulative effect of change in depreciation method (debit)......... Loss on sale of plant assets.... Sales returns..... $424,000 (3,000) 8,000 9,000