Problem 4-1 (Algo) Comparative income statements; multiple-step format [LO4-1, 4-3, 4-4, 4-5] Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $ 5,000,000 $ 4,100,000 2,980,000 2,120,000 920,000 795,000 480,000 422,000 162,000 152,000 224,000 224,000 96,000 On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $96,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: Sales revenue Cost of goods sold Administrative expense Selling expense 1/1/2024-9/30/2024 $520,000 (350,000) 2023 $ 620,000 (392,000) Operating income before taxes (62,000) (32,000) $ 76,000 (52,000) (32,000) $ 144,000 In addition to the account balances above, several events occurred during 2024 that have not yet been reflected in the above accounts: 1. A fire caused $62,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $52,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. Required: Prepare a multiple-step income statement for the Reed Company for 2024, showing 2023 information in comparative format, including income taxes computed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock. Note: Round EPS answers to 2 decimal places. Sales revenue Cost of goods sold Gross profit (loss) Answer is not complete. REED COMPANY Comparative Income Statements For the Years Ended December 31 2024 2023 $ 4,480,000 $ 3,480,000 2,630,000 1,728,000 1,850,000 1,752,000 Operating expenses: Administrative expense 858,000 743,000 Selling expense 448,000 390,000 Loss on building (fire damage) 96,000 Loss on inventory write-down 47,000 Total operating expenses 1,449,000 1,133,000 401,000 619,000 Operating income Other income (expense): Interest revenue 162,000 152,000 Interest expense (224,000) (224,000) Total other income, net (62,000) (72,000) Income from continuing operations before income taxes 339,000 547,000 Income tax expense 84,750 136,750 Income from continuing operations 254,250 410,250 Discontinued operations: Income (loss) from operations of discontinued component 14,000 144,000 Income (loss) on discontinued operations Net income 14,000 144,000 $ 240,250 $ 554,250 Earnings per share: Income from continuing operations Discontinued operations Net income