The income statements that follow are for Kaluza Hardware Corporation.

REQUIRED
1. From the information provided, prepare a multistep income statement for 2011 and 2010 showing percentages of net sales for each component.
2. Did income from operations increase or decrease from 2010 to 2011? Write a short explanation of why this change occurred.
3. What effect did other revenues and expenses have on the change in income before income taxes? What action by Kaluza Hardware€™s management probably accounted for thischange?

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Kaluza Hardware Corporation Income Statements For the Years Ended July 31, 2011 and 2010 2011 2010 Revenues Net sales Interest income Total revenues $464,200 1,420 $465,620 $388,466 750 $389,216 Costs and expenses Cost of goods sold Selling expenses General and administrative expenses Interest expense Total costs and expenses $243,880 95,160 90,840 5,600 $435,480 30,140 8,000 S 22,140 S 2.21 $198,788 55,644 49,286 1,100 $304818 84,398 21,250 63,148 S 6.31 Income before income taxes Income taxes Net income Earnings per share