prepare a multi step income statement for Reed comoany for 2021 showing 2020 information comoaritive format, including income taxes conputed at 25% and EPS disclosures assuming 500,000 shares of outstanding common stock

(ignore balances already recorded)

Selected information about income statement accounts for the Reed Company is presented below the company's fiscal year ends on December 31): Sales revenue Coat of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2021 2020 $5,000,000 $4,100,000 2,980,000 2,120,000 920,000 795,000 480,000 422,000 162,000 152,000 224,000 224,000 96,000 On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $96,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes 1/1/2021-9/30/2021 $ 520,000 (350,000) (62,000) (32,000) $ 76,000 2020 $ 620,000 (392,000) (52,000) (32,000) $ 144,000 In addition to the account balances above, several events occurred during 2021 that have not yet been reflected in the above accounts: 1. A fire caused $62,000 in uninsured damages to the main office building. The fire was considered to be an unusual event 2. Inventory that had cost $52,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded. REED COMPANY Comparative Income Statements For the Years Ended December 31 Sales revenue Cost of goods sold Gross profit (loss) Operating expenses: Administrative expense Selling expense 2021 2020 $ 5,000,000 $4,100,000 2,980,000 2,120,000 +2,020,000 1,980,000 920,000 480,000 795,000 422,000 Total operating expenses Operating income Other income (expense): 1,400,000 620,000 1,217,000 763,000 Other income (expense): Loss on building (fire damage) Loss on inventory write-down Total other income, net Income from continuing operations before income taxes (62,000) (5,000) (67,000) 0 0 0 Income from continuing operations Discontinued operations: 0 Income (loss) on discontinued operations Net income Earnings per share: 0 0 $ $ 0 Net income