The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year.

1. Prepare a multiple-step income statement in good form for the year ending December 31,2012.

2. Prepare a retained earings statement in good form for the year ending December 31,2012.

The following pretax amounts pertain to the Brooke Corp. for the year ended in December 31,2012...

Sales ................................................. $ 400,000

Operating expenses .................................... 84,000

Extraordinary gain .................................... 30,000

Interest expense ...................................... 4,000

Cost of goods sold .................................... 280,000

Gain on sale of equipment ............................. 10,000

Prior period adjustment ............................... (16,000)

Gain on disposal of business segment .................. 40,000

Cumulative effect of change in accounting principle ... (24,000)

Retained earnings, January 1, 2012 .................... 1,600,000

Dividends declared .................................... 12,000