Synandre Montaque is the CEO of Montaque Corporation. The company recently held a webcast to announce preliminary results for the year ending December 31, 20X5. The webcast began with a opening statement by Synandre, followed by a question and answer session from analysts and investors who utilized a call in Q&A phone line. Following is the transcript of the session:

Assume you are a financial analyst. Your assignment is to a review the above transcript and prepare a report for your clients that includes a preliminary view of how you think the income statement will appear, when issued. Prepare both a multiple-step and single-step income statement for their review.

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Synandre Ladies and gentleman, thank you for tuning in today. There has been a rash of recent speculation that Montaque Corporation's 20X5 reported results will fall short of previously announced guidance. I wish to allay that fear by today offering some preliminary informa- tion about 20X5's results. Our official results will be released on February 19, when our in- dependent auditors issue their final report. Synandre With that having been said, I am very pleased that we will be reporting record gross sales of $5,675,000,000 for the reporting period. Our gross profit margin continues at a very fa- vorable 44%, and our bottom line net income will equal the targeted 4% of net sales goal. With that good news, I will be pleased to answer your questions? Caller #1 Congratulations on those very good results. I did note that you referred to gross sales as record setting. But, there have been reports of product failures resulting in a very high rate of return. Can you respond to that issue? Synandre That is very plainly bunk; a rumor being spread by our competition. We continue to gain market share across all areas. Our sales returns and allowances will come in at only 3% of gross sales. Now, to be clear, we did offer improved credit terms to our key customers this year, and our sales discounts will amount to 1.5% of gross sales. Caller #2 You began the year with inventory of $425,000000, and indicated that you desired to trim that level. Did you accomplish that goal?