Jim Heller, accountant for Complete Home Finance, was injured in a boating accident. Another employee prepared the accompanying income statement for the year ended December 31, 2012.

The individual amounts listed on the income statement are correct. However, some accounts are reported incorrectly, and two items do not belong on the income statement at all. Also, income tax has not been applied to all appropriate figures. The income tax rate on discontinued operations was 40%. Complete Home Finance issued 55,000 shares of common stock in 2012 and held 5,000 shares as treasury stock during 2012. Retained earnings at December 31, 2011, was $167,000.
Requirement
1. Prepare a corrected combined statement of income and retained earnings for the fiscal year ended December 31, 2012, including earnings per share. Prepare the income statement in single-stepformat.

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COMPLETE HOME FINANCE Income Statement Year ended December 31, 2012 Revenue and gains: $ 362,000 Sales Paid-in capital in cxcess of par-common 93,000 Total revenues and gains 455,000 Expenses and losses: Cost of goods sold Selling expenscs General expenses 102,000 70,000 63,500 Sales returns 12,000 Sales discounts 5,500 Dividends 17,000 Income tax expense 34,000 Total expenses and losses 304,000 Income from operations $ 151,000 Other gains and losses Gain on discontinucd operations 4,500 S 155,500 Net income Earnings per share 3.11