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The following pretax amounts pertain to the Spartan Corp. for the year ended December 31, 2017.
| Sales ................................................. | $ 400,000 |
| Operating expenses .................................... | 84,000 |
| Interest expense ...................................... | 4,000 |
| Cost of goods sold .................................... | 280,000 |
| Gain on sale of equipment ............................. | 10,000 |
| Prior period adjustment ............................... | (16,000) |
| Gain on disposal of business component.................. | 30,000 |
| Retained earnings, January 1, 2017 .................... | 1,600,000 |
| Dividends declared .................................... | 12,000 |
The effective corporate tax rate is 30 percent. The company had 10,000 shares of common stock outstanding for the entire year.
| (1) | Prepare a multiple-step income statement in good form for the year ended December 31, 2017. |
| (2) | Prepare a retained earnings statement in good form for the year ended December 31, 2017. |
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