A3-4 Income Statement Formats: The information below pertains to the operations of Montreal Retail Corp. for the year ended 31 December 20X6: Cost of merchandise sold $102,000 Inventory warehousing cost 20,000 Accounts payable 120,000 Sales revenue 525,000 Accumulated depreciation 140,000 Sales returns 5,000 Unearned revenue 2,000 Depreciation expense 50,000 Rent revenue 4,000 Employee wages, salaries, and benefits 100,000 Interest expense 6,000 Investment revenue 3,000 Loss on disposal of geographic segment 30,000 Loss on disposal of geographic segment 30,000 Earnings from discontinued geographic segment 20,000 Distribution expenses 106,000 General and administrative expenses 46,000 Loss on sale of noncurrent assets 13,000 Income tax expense ? Fire loss 20,000 Page 136 Additional information: Functional costs do not include depreciation or employee costs. Depreciation expense pertains 50% to warehousing cost, 30% to administrative costs, and 20% to distribution expense. Employee wages, salaries, and benefits pertain 20% to warehousing and merchandising, 50% to administrative costs, and 30% 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. Required: 1. Prepare an income statement on a functional basis, in a single-step format. 2. Prepare an income statement on the basis of nature of expense, using a multiple-step format