Counting Crows Inc. provided the following information for the year 2012.

AccountingPrepare (a) a single step income statement for 2012, (b) a retained earnings statement for 2012, and (c) a statement of comprehensive income using the second income statement format. Shares outstanding during 2012 were 100,000.AnalysisExplain how a multiple-step income statement format can provide useful information to a financial statement user.PrinciplesIn a recent meeting with its auditor, Counting Crows?? management argued that the company should be able to prepare a pro forma income statement with some one-time administrative expenses reported similar to extraordinary items and discontinued operations. Is such reporting consistent with the qualitative characteristics of accounting information as discussed in the conceptual framework?Explain.

$ 600,000 240,000 300,000 Retained earnings, January 1, 2012 Administrative expenses Selling expenses Sales revenue Cash dividends declared Cost of goods sold Extraordinary gain Loss on discontinued operations 1,900,000 80,000 850,000 95,000 75,000 Rent revenue 40,000 Unrealized holding gain on available-for-sale securities Income tax applicable to continuing operations Income tax benefit applicable to loss on discontinued operations Income tax applicable to extraordinary gain Income tax applicable to unrealized holding gain on available-for-sale securities 17,000 187,000 25,500 32,300 2,000