Use the information in BE4-12 to prepare a multiple-step income statement for Sierra Corporation, showing expenses by function.

In BE4-12

Sierra Corporation had net sales revenue of $5,850,000 and investment revenue of $227,000 for the year ended December 31, 2017. Other items pertaining to 2017 were as follows:

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Cost of merchandise sold $4,610,000 368,000 126,000 78,000 Salaries and wages Advertising and promotion Entertainment Selling expenses Salaries and wages 572,000 300,000 101,000 44,000 445,000 Rent Utilities Administrative expenses Increase in value of company reputation Unrealized gain on value of patents Interest expense Income tax expense 74,000 36,000 160,000 84,000