Shown below is an income statement for the 2014 year that was prepared by a poorly trained bookkeeper of Watts Updoc Corporation.

Watts Updock Corporation

INCOME STATEMENT

December 31, 2014

Sales revenue $ 945,000

Deferred Revenue 35,000

Investment revenue 19,500

Cost of merchandise sold (408,500)

Selling expenses (145,000)

Administrative expense (215,000)

Interest expense (13,000)

Loss on disposal of a component of the business (30,000)

Major casualty loss (extraordinary item) (70,000)

Net Federal income tax liability (24,900)

Net income $ 93,100

Required:

Prepare a multiple-step income statement for 2014 presented in accordance with generally accepted accounting principles (including format and terminology).

Watts Updock Corporation has 50,000 shares of common stock outstanding.

It has a 30% federal income tax rate.