The following income statement was prepared by a new and inexperienced employee in the accounting department of Dexter, Inc., a business organized as a corporation.

Instructions
a. Prepare a corrected income statement for the year ended December 31, 2018, using the format illustrated in Exhibit 12-2. Include at the bottom of your income statement all appropriate earnings per share figures. Assume that throughout the year the company had outstanding a weighted average of 500,000 shares of a single class of capital stock.
b. Prepare a statement of retained earnings for 2018. (As originally reported, retained earnings at December 31, 2017, amount to $3,200,000.)
c. What does the $56,000 "Gain on sale of treasury stock" represent? How would you report this item in Dexter's financial statements at December 31, 2018?

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DEXTER, INC INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2018 $10,200,000 56,000 Excess of Issuance price over par value of 710,000 190,000 $11,156,000 Less Cost of goods sold . . . $4,000,000 General and administrative expenses . .. . 840,000 10,000 . . . . .. .612,000 . . . . . . . . . Income tax on continuing operations . . ....._.. . . . Operating loss on discontinued operations Loss on disposal of discontinued operations 240,000 Dividends declared on common stock 300,000 . . . . .. . . . .. 7.232,000 3,924,000