The information below pertains to the operations of Montreal Retail Corporation for the year ended 31 December 20X6: Cost of merchandise sold Inventory warehousing cost Accounts payable Sales revenue Accumulated depreciation Sales returns Unearned revenue Depreciation expense Rent revenue $106,000 24,000 124,000 565,000 144,000 5,400 2,400 54,000 4,400 104,000 6,400 3,400 Loss on disposal of geographic segment 34,000 Earnings from discontinued geographic segment 24,000 Distribution expenses 110,000 General and administrative expenses Loss on sale of noncurrent assets 50,000 13,400 Income tax expense Fire loss 24,000 Employee wages, salaries, and benefits Interest expense Investment revenue Additional information: Functional costs do not include depreciation or employee costs. Depreciation expense pertains 55% to warehousing cost, 30% to administrative costs, and 15% to distribution expense. Employee wages, salaries, and benefits pertain 25% to warehousing and merchandising, 40% to administrative costs, and 35% to distribution expense. The company's income tax rate is 20%. Assume that the tax rate pertains to all elements of revenue, expense, gain, and loss. 1. Prepare an income statement on the basis of nature of expense, using a single-step format. (Loss amounts should be indicated by a minus sign.) Revenues and gains MONTREAL RETAIL CORPORATION Income Statement Year Ended 31 December 20X6 On Canadian dollars) Total revenues and gains Expenses and losses Operating and administrative expenses Other expenses and losses 0 Total expenses and losses Earnings from continuing operations 0 Net income and comprehensive income $ 0 ces 2. Prepare an income statement on a functional basis in a multiple-step format. (Loss amounts should be indicated by a minus sig MONTREAL RETAIL CORPORATION Income Statement Year Ended 31 December 20X6 (in Canadian dollars) Net sales Operating and administrative expenses 0 Pray 2 of 3 Next > Total operating and administrative expenses Income from operations Other revenues and gains Other expenses and losses) Income before income tax Income before discontinued operation Net income and comprehensive income 0 0 0 0 0 $ 0 0 0