The trial balance of XYZ COMPANY shows the following items of income and expense for the period ended December 31, 2019:

Accounts Dr. Cr.

Sales 1,800,000

Interest income 120,000

Gains 40,000

Inventory, beg. 100,000

Purchases 400,000

Freight-in 20,000

Purchase returns 10,000

Purchase discounts 14,000

Freight-out 50,000

Sales commission 60,000

Advertising expense 30,000

Salaries expense 600,000

Rent expense 60,000

Depreciation expense 80,000

Utilities expense 40,000

Supplies expense 20,000

Transportation and travel expense 10,000

Insurance expense 24,000

Taxes and licenses 140,000

Interest expense 4,000

Miscellaneous expense 2,000

Loss on the sale of equipment 30,000

Totals 1,670,000 1,984,000

Additional information:

a. Ending inventory is 160,000.

b. One-half of the salaries, rent, and depreciation expenses pertain to the sales department. The sales department does not share in the other expenses.

Requirements:

a. Prepare the statement of comprehensive income using the function of expense method (Multi-step approach). Be sure to place a proper heading for the statement.

b. Prepare a partial notes showing breakdowns for the selected line items.