The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 20X6:

Cost of merchandise sold $ 116,000

Inventory warehousing cost 34,000

Accounts payable 134,000

Sales revenue 665,000

Accumulated depreciation 154,000

Sales returns 6,400 Unearned revenue 3,400

Depreciation expense 64,000

Rent revenue 5,400

Employee wages, salaries, and benefits 114,000

Interest expense 7,400

Investment revenue 4,400

Loss on disposal of geographic segment 44,000

Earnings from discontinued geographic segment 34,000

Distribution expenses 120,000

General and administrative expenses 60,000

Loss on sale of noncurrent assets 14,400

Income tax expense ?

Fire loss 34,000

Additional information: Functional costs do not include depreciation or employee costs. Depreciation expense pertains 55% to warehousing cost, 25% to administrative costs, and 20% to distribution expense. Employee wages, salaries, and benefits pertain 30% to warehousing and merchandising, 45% to administrative costs, and 25% to distribution expense. The companys income tax rate is 30%. Assume that the tax rate pertains to all elements of revenue, expense, gain, and loss. Required:

1. Prepare an income statement on the basis of nature of expense, using a single-step format.

2. Prepare an income statement on a functional basis in a multiple-step format.