The following data were taken from the records of Lilo Corporation for the year ended December 31, 2022 before any adjustment for bad debt expense:

Sales of merchandise for cash	$ 150,000
Sales of merchandise on credit	800,000
Sales returns and allowances	10,000
Sales salaries expense	80,000
Cost of sales	610,000
Administrative expenses	90,000

The following items have not been included in above amounts: Estimated bad debt expense is 1% of credit sales. The income tax rate is 35%. 10,000 of shares of common stock are outstanding. Required:

A. Calculate the bad debt expense. B. Prepare a multiple-step income statement (including gross profit, income before income taxes, and earnings per share).