Karla Company provided the following information for the current year: 5,150,000 250,000 1911 Purchases Purchase returns and allowances Rental income Selling expenses: Freight out Salesmen's commission Depreciation - store equipment Merchandise inventory, January 1 Merchandise inventory, December 31 Sales Sales returns and allowances Sales discounts Administrative expenses: Officers' salaries Depreciation - office equipment Freight in Income tax Loss on sale of equipment Purchase discounts Dividend revenue Loss on sale of investment 175,000 650,000 125,000 1,000,000 1,500,000 7,850,000 140,000 10,000 500,000 300,000 500,000 250,000 50,000 100,000 150,000 50,000 Required: a. Prepare an income statement for the year using the functional method with supporting notes. b. Prepare an income statement for the year using the "natural" method with supporting notes