ACCT 510: Financial Statement Knowledge Assessrment Page 9 2) Presented below is infornmation related to Andy's Employee NM Misfits Ageney, Inc. S 650,000 Retained earnings, January 1,2010 Sales Selling and administrative expenses Hurricane loss (before tax) on plant Cash dividends declared and paid on common stock Cost of goods sold Gain resulting from computation error on depreciation (error was not discovered until 2010) Dividend income Loss on sale of building 1,600,000 240,000 250,000 33,600 960,000 520,000 60,000 50,000 earnings for Andy's for the year ended December 31, 2010. Assume a 30% tax rate and that 100,000 shares of common stock were outstanding during the year a) Prepare (in good form) a multiple-step income statement (with EPS) and a statement of retained b) How does the multi-step income statement format approach lend itself to effective analysis of a company's performance