This income statement was prepared by Bob’s Bookkeeping Service for the Atlas Corporation:

ATLAS CORPORATION

Income Statement

At December 31, 2010

Sales ………………………………. $ 1,200,000

Interest income ………………………….. 5,000

Less sales returns ………………………… 9,000

Net sales …………………………… $ 1,196,000

Cost of goods sold …………………… 740,000

Gross margin ………………………. $ 456,000

Gain on sale of equipment ……………. 40,000

Total revenue inflows ……………… $ 496,000

Administrative expenses ……………. 120,000

Selling expenses ………………………. 45,000

Loss on sale of land ……………………. 10,000

Operating income …………………… $ 321,000

Interest expense …………………………. 9,000

Extraordinary loss on building …………. 20,000

Income from continuing operations … $ 292,000

Tax expense (30%) ………………….. $ 87,600

Net income ………………………… $ 204,400

Required: 

A. Make a list of all the errors found on this income statement and briefly describe what is wrong. 

B. Prepare a correct multistep income statement for Atlas Corporation.