Melton Corporation is preparing the comparative fi nancial statements for the annual report to its shareholders for fi scal years ended May 31, 2020, and May 31, 2021. The income from operations for the fi scal year ended May 31, 2020, was $1,800,000 and income from continuing operations for the fi scal year ended May 31, 2021, was $2,500,000. In both years, the company incurred a 10% interest expense on $2,400,000 of debt, an obligation that requires interestonly payments for 5 years. The company experienced a loss from discontinued operations of $600,000 on February 2021. The company uses a 20% eff ective tax rate for income taxes. The capital structure of Melton Corporation on June 1, 2019, consisted of 1 million shares of common stock outstanding and 20,000 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants. On October 1, 2019, Melton sold an additional 500,000 shares of the common stock at $20 per share. Melton distributed a 20% stock dividend on the common shares outstanding on January 1, 2020. On December 1, 2020, Melton was able to sell an additional 800,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fi scal years.