Problem $4-1($Algo$)$ Comparative income statements; multiple$-$step format $[$LO$4-1,4-3,4-4,4-5]$

Selected information about income statement accounts for the Reed Company is presented below $($the company's fiscal year ends on December $31)$:

On July $1,2024,$ 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 $30,2024,$ for $\backslash$$$92,000$ less than their book value. Results of operations for the component $($included in the above account balances$)$ were as follows:

In addition to the account balances above, several events occurred during $2024$ that have not yet been reflected in the above accounts: $\backslash (\backslash$square $\backslash )$

$1.$ A fire caused $\backslash (\backslash$$ $61,000\backslash )$ in uninsured damages to the main office building. The fire was considered to be an unusual event.

$2.$ Inventory that had cost $\backslash (\backslash$$ $51,000\backslash )$ had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $\backslash (\backslash$$ $5,000\backslash ).$

$3.$ Income taxes have not yet been recorded.

Required:

Prepare a multiple$-$step income statement for the Reed Company for $2024,$ showing $2023$ information in comparative format, including income taxes computed at $\backslash (25\backslash \%\backslash )$ and EPS disclosures assuming $400,000$ shares of outstanding common stock. Note: Round EPS answers to $2$ decimal places.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$REED COMPANY$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Comparative Income Statements$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$For the Years Ended December $31\}\backslash \backslash$

$\backslash$hline & $2024$ & $2023\backslash \backslash$

$\backslash$hline Sales revenue & $\backslash$$ $4,440,000$ & $\backslash$$ $3,440,000\backslash \backslash$

$\backslash$hline Cost of goods sold & $2,625,000$ & $1,724,000\backslash \backslash$

$\backslash$hline Gross profit $($loss$)$ & $1,815,000$ & $1,716,000\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Operating expenses:$\}\backslash \backslash$

$\backslash$hline Administrative expense & $849,000$ & $734,000\backslash \backslash$

$\backslash$hline Selling expense & $439,000$ & $381,000\backslash \backslash$

$\backslash$hline Loss on building $($fire damage$)$ & $61,000\backslash (\backslash$cdot $\backslash )$ & $\backslash \backslash$

$\backslash$hline Loss on inventory write$-$down & $46,000\backslash (\backslash$cdot $\backslash )$ & $\backslash \backslash$

$\backslash$hline Total operating expenses & $1,395,000$ & $1,115,000\backslash \backslash$

$\backslash$hline Operating income & $420,000$ & $601,000\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Other income $($expense$)$:$\}\backslash \backslash$

$\backslash$hline Interest revenue & $161,000$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline Interest expense & $\backslash ((222,000)>\backslash )$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline Total other income, net & $\backslash ((61,000)\backslash )$ & $0\backslash \backslash$

$\backslash$hline Income from continuing operations before income taxes & $359,000$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline $\backslash (\backslash$times $\backslash )$ & $\backslash (\backslash$times $\backslash )$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline Income from continuing operations & $359,000$ & $0\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Discontinued operations:$\}\backslash \backslash$

$\backslash$hline Income $($loss$)$ from operations of discontinued component & $\backslash (68,000\backslash$times $\backslash )$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline $\backslash (\backslash$times $\backslash )$ & $\backslash (\backslash$times $\backslash )$ & $\backslash (\backslash$times $\backslash )\backslash \backslash$

$\backslash$hline Income $($loss$)$ on discontinued operations & $68,000$ & $0\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

$*$Red text indicates no response was expected in a cell or a formula$-$based calculation is incorrect; no points deducted.