Porter Corporation's capital structure consists of 50,000 shares of common stock. At December 31, 2014 an analysis of the accounts and discussions with company officials revealed the following information:

Sales revenue $1,200,000

Earthquake loss (net of tax) (extraordinary item) 56,000

Selling expenses 128,000

Cash 60,000

Accounts receivable 90,000

Common stock 200,000

Cost of goods sold 701,000

Accumulated depreciation-machinery 180,000

Dividend revenue 8,000

Unearned service revenue 4,400

Interest payable 1,000

Land 370,000

Patents 100,000

Retained earnings, January 1, 2014 290,000

Interest expense 17,000

Administrative expenses 170,000

Dividends declared 24,000

Allowance for doubtful accounts 5,000

Notes payable (maturity 7/1/17) 200,000

Machinery 450,000

Materials 40,000

Accounts payable 60,000

The amount of income taxes applicable to ordinary income was $57,600, excluding the tax effect of the earthquake loss which amounted to $24,000.

Instructions

(a) Prepare a multiple-step income statement.

(b) Prepare a retained earnings statement.