Prepare an income statement for the year 2014 starting with income from continuing operations before taxes.

Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding

for the year are 120,000 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.)

P4-4 (Multiple- and Single-Step Income, Retained Earnings) The following account balances were included

in the trial balance of Twain Corporation at June 30, 2014.

Sales revenue $1,578,500 Depreciation expense (offi ce

Sales discounts 31,150 furniture and equipment) $ 7,250

Cost of goods sold 896,770 Property tax expense 7,320

Salaries and wages expense (sales) 56,260 Bad debt expense (selling) 4,850

Sales commissions 97,600 Maintenance and repairs

Travel expense (salespersons) 28,930 expense (administration) 9,130

Delivery expense 21,400 Offi ce expense 6,000

Entertainment expense 14,820 Sales returns and allowances 62,300

Telephone and Internet expense (sales) 9,030 Dividends received 38,000

Depreciation expense (sales equipment) 4,980 Interest expense 18,000

Maintenance and repairs expense (sales) 6,200 Income tax expense 102,000

Miscellaneous selling expenses 4,715 Depreciation understatement

Offi ce supplies used 3,450 due to error2011 (net of tax) 17,700

Telephone and Internet expense Dividends declared on

(administration) 2,820 preferred stock 9,000

Dividends declared on common

stock 37,000

The Retained Earnings account had a balance of $337,000 at July 1, 2013. There are 80,000 shares of common

stock outstanding.

Instructions

(a) Using the multiple-step form, prepare an income statement and a retained earnings statement for

the year ended June 30, 2014.

(b) Using the single-step form, prepare an income statement and a retained earnings statement for the

year ended June 30, 2014.