Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2020.

(000 omitted)

Net sales revenue

$640,000

Costs and expenses

Cost of goods sold $500,000

Selling, general, and administrative expenses 66,000

Other, net17,000

583,000

Income before income tax57,000

Income tax19,400

Net income37,600

Retained earnings at beginning of period, as previously reported141,000

Adjustment required for correction of error(7,000

)

Retained earnings at beginning of period, as restated134,000

Dividends on common stock(12,200

)

Retained earnings at end of period$159,400

Additional facts are as follows.

1."Selling, general, and administrative expenses" for 2020 included a charge of $8,500,000 that was usual but infrequently occurring.2."Other, net" for 2020 included a loss on sale of equipment of $6,000,000.3."Adjustment required for correction of an error" was a result of a change in estimate (useful life of certain assets reduced to 8 years and a catch-up adjustment made).4.Nerwin Company disclosed earnings per common share for net income in the notes to the financial statements.

Determine from these additional facts whether the presentation of the facts in the Nerwin Company income and retained earnings statement is appropriate. If the presentation is not appropriate, describe the appropriate presentation and discuss its theoretical rationale.