Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2017.

(000 omitted)

Net sales $640,000

Costs and expenses

Cost of goods sold $500,000

Selling, general, and administrative expenses 66,000

Other, net 17,000 583,000

Income before income tax 57,000

Income tax 19,400

Net income 37,600

Retained earnings at beginning of period, as previously reported 141,000

Adjustment required for correction of error (7,000 )

Retained earnings at beginning of period, as restated 134,000

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 2017 included a charge of $8,500,000 that was usual but infrequently occurring.

2. Other, net for 2017 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.