Presented below is information related to Aquinas Co.:

Retained earnings, December 31, 2021 $ 750,000

Sales revenue 1,405,000

Additional paid-in-capital 220,000

Loss on sale of equipment 18,000

Selling expenses 137,000

Loss (pre-tax) from discontinued operations 250,000

Cash dividends declared on common stock 40,000

Administrative expenses 96,000

Deferred revenue (unearned revenue) 63,000

Cost of goods sold 829,000

Prepaid expenses 78,000

Gain resulting from computation error on depreciation charge in 2021 (net-of-tax) 430,000

Interest revenue 24,000

Instructions

(a) Prepare in good form a multiple-step income statement for Aquinas Co. for the year ended December 31, 2022. Assume a 21% tax rate and that 50,000 shares of common stock were outstanding during the year. (6 points)

(b) Write a detailed description of the steps you took to prepare this income statement