Presented below is a combined single-step income and retained earnings statement for Nerwin Company for 2014.

Net sales revenue $640,000

Costs and expenses

Costs of goods sold $500,00

Selling, general, and administrative expenses $66,000

Other,net $17,000

Income before income tax $57,000

Income tax $19,400

Net income $37,600

Retained earnings at beggining of period, as previously reported $141,000

Adjustment required for correction of error (7,000)

Retained earnings at beggining of period, as restated $134,000

Dividends on common stock (12,000)

Additional facts are as follows.

1)" Selling,general and administrative expenses" for 2014 included a charge of $8,500,000 that was usual but infrequently occuring.

2) "other, net" for 2014 includes an extraordinary item (charge) of $6,000,000. If the extraordinary item (charge) had not occurred, net income taxes for 2014 would have been $21,400,000 instead of $19,400,000.

3) "Adjustment required for correction of an error" was a result of a change in estimate (usefull life of certain assets reduced to 8 years and catch-up adjustment made)

4) Nerwin company disclosed earnings per common share for net income in the notes to the financial statements.

Determine if the presentation is appropriate if not describe its theoretical rationale