Selected information about income statement accounts for the reed company

In addition to the account balances above, several events occurred during 2016 that have not yet been reflected in the above accounts:

1.
A fire caused $58,000 in uninsured damages to the main office building. The fire was considered to be an infrequent but not unusual event.

2.
Inventory that had cost $48,000 had become obsolete because a competitor introduced a better product. The inventory was sold as scrap for $8,000.

3. Income taxes have not yet been recorded.
Required:
Prepare a multiple-step income statement for the Reed Company for 2016, showing 2015 information in comparative format, including income taxes computed at 40% and EPS disclosures assuming 500,000 shares of common stock. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)

8.

For the year ending December 31, 2016, Micron Corporation had income from continuing operations before taxes of $1,250,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.

1.
In November 2016, Micron sold its Waffle House restaurant chain that qualified as a component of an entity. The company had adopted a plan to sell the chain in May 2016. The income from operations of the chain from January 1, 2016, through November was $165,000 and the loss on sale of the chain’s assets was $310,000.

2.
In 2016, Micron sold one of its six factories for $1,300,000. At the time of the sale, the factory had a carrying value of $1,150,000. The factory was not considered a component of the entity.

3.
In 2014, Micron’s accountant omitted the annual adjustment for patent amortization expense of $125,000. The error was not discovered until December 2016.