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Problem I Porter Corporation's capital structure consists of 50,000 shares of common stock. On December 31, 2012, an analysis of the accounts and discussions with company ofcials revealed the following information: Sales revenue $1,100,000 Purchase discounts 10,000 Purchases 692,000 Earthquake loss (net of tax) (extraordinary item) 35,000 Selling expenses 120,000 Cash 60,000 Accounts receivable 90,000 Common stock 200,000 Accumulated depreciation-machinery 100,000 Dividend revenue 0,000 Inventory, January 1, 2012 152,000 Inventory, December 31, 2012 125,000 Uneamed senrice revenue 4,400 Interest payable 1,000 Land 370,000 Patents 100,000 Retained earnings, January 1, 2012 290,000 Interest expense 17,000 Administrative expenses 170,000 Dividends declared 24,000 Allowance for doubtful accounts 5,000 Notes payable (maturity July 1, 2015) 200,000 Machinery 450,000 Materials 40,000 Accounts payable 60,000 The amount of income taxes applicable to ordinary income was $27,600, excluding the tax effect of the earthquake loss which amounted to $15,000. Using the data given above, you are required to do the following: - Prepare a multiple-step income statement. - Prepare a retained earnings statement