Exercise 4-13A Multistep income statement LO 4-6 In Year 1, Kim Company sold land for $97,000 cash. The land had originally cost $55,000. Also, Kim sold inventory that had cost $185,000 for $290,000 cash. Operating expenses amounted to $49,000. Required a. Prepare a Year 1 multistep income statement for Kim Company. KIM COMPANY Income Statement For the year ended December 31, Year 1 $ Sales revenue 290,000 Cost of goods sold (185,000) Gross margin 105,000 Expenses Operating expenses (49,000) 56,000 Non-Operating Items Gain on sale of land Net income $56,000 b. Assume that normal operating activities grow evenly by 22% during Year 2. Prepare a Year 2 multistep income statement for Kim Company. KIM COMPANY Income Statement For the year ended December 31, Year 2 Expenses Non-Operating Items c. Determine the percentage change in net income between Year 1 and Year 2. (Round your answer to one decimal place.) Net income by % d. Should the stockholders have expected the results determined in Requirement c? Yes No