2. Prepare an income statement on a functional basis in a multiple-step format. (Loss amounts should be indicated by a minus sign.) \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ MONTREAL RETAIL CORPORATION } \\ \hline \multicolumn{4}{|c|}{ Income Statement } \\ \hline \multicolumn{4}{|c|}{ Year Ended 31 December 20X6 } \\ \hline \multicolumn{4}{|c|}{ (in Canadian dollars) } \\ \hline Sales revenue & & & $605,000 \\ \hline Less: sales returns & & & (5,800) \\ \hline Net sales & & & 599,200 \\ \hline Cost of merchandise sold & & & (110,000) \\ \hline Gross margin & & & 489,200 \\ \hline \multicolumn{4}{|l|}{ Operating and administrative expenses: } \\ \hline Inventory warehousing cost & & $(2,800) & \\ \hline Distribution expense & & (114,000) & \\ \hline General and administrative expenses & & (54,000) & \\ \hline \multicolumn{4}{|l|}{ Gain (loss) on discontinued operation } \\ \hline Total operating and administrative expenses & & & (170,800) \\ \hline Income from operations & & & 318,400 \\ \hline \multicolumn{4}{|l|}{ Other revenues and gains: } \\ \hline Rent revenue & $4,800 & & \\ \hline Investment revenue & 3,800 & & \\ \hline unearned revenue & 2,800 & 11,400 & \\ \hline \multicolumn{4}{|l|}{ Other expenses and losses: } \\ \hline Interest expense & (6,800) & & \\ \hline & & & \\ \hline & & & \\ \hline 5 & & (6,800) & 4,600 \\ \hline Income before income tax & & & 313,800 \\ \hline Income tax expense & & & = \\ \hline Income before discontinued operation & & & 313,800 \\ \hline \end{tabular} The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 206 : Additional information: - Functional costs do not include depreciation or employee costs. - Depreciation expense pertains 55% to warehousing cost, 30% to administrative costs, and 15% to distribution expense. - Employee wages, salaries, and benefits pertain 30% to warehousing and merchandising. 45% to administrative costs, and 25% to distribution expense. - The company's income tax rate is 20%. Assume that the tax rate pertains to all elements of revenue, expense, gain, and loss. \begin{tabular}{|l|l|r|} \hline Income before discontinued operation & & 313,800 \\ \hline Gain (loss) on discontinued operation & & \\ \hline Net income and comprehensive income & & $313,800 \\ \hline \end{tabular}