DB 4-3 Multiple-step Income Statement and Statement of Retained Earnings Presented below is information related to Hamm Corp. for the current year:

Administrative expenses 96,000

Dividends declared 90,000

Dividend revenue 40,000

Retained earnings, Dec. 31 (end of prior year) 1,960,000

Cost of goods sold 1,560,000

Depreciation expense omitted in prior year 110,000

Selling expense 130,000

Loss from flood damage 100,000

Net sales $2,600,000

Write-off of inventory due to obsolescence $ 160,000

Interest revenue 14,000 Loss from discontinued operation (pre-tax) 50,000

Assume an effective tax rate of 34% on all items.

Required:

(a) Prepare a multiple-step income statement for the current year. (You can disregard EPS calculations forthis problem.) (b) Prepare a statement of retained earnings for the current year.