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Selected information about income statement accounts for theReed Company is presented below (the company's fiscal year ends onDecember 31):

		2016		2015
Sales	$	4,700,000	$	3,800,000
Cost of goodssold		2,920,000		2,060,000
Administrativeexpenses		860,000		735,000
Sellingexpenses		420,000		372,000
Interestrevenue		156,000		146,000
Interestexpense		212,000		212,000
Loss on sale ofassets of discontinued component		74,000		—

On July 1, 2016, the company adopted a plan to discontinue adivision that qualifies as a component of an entity as defined byGAAP. The assets of the component were sold on September 30, 2016,for $74,000 less than their book value. Results of operations forthe component (included in the above account balances)were as follows:

	1/1/16-9/30/16				2015
Sales		$	460,000		$	560,000
Cost of goods sold			(320,000	)		(356,000	)
Administrative expenses			(56,000	)		(46,000	)
Selling expenses			(26,000	)		(36,000	)
Operating income before taxes		$	58,000		$	122,000

In addition to theaccount balances above, several events occurred during 2016 thathave not yet been reflected in the above accounts:
1.	A fire caused $56,000 in uninsured damages to the main officebuilding. The fire was considered to be an infrequent but notunusual event.
2.	Inventory that had cost $46,000 had become obsolete because acompetitor introduced a better product. The inventory was sold asscrap for $6,000.
3.	Income taxes have not yet been recorded.

Required:

Prepare a multiple-step income statement for the Reed Companyfor 2016, showing 2015 information in comparative format, includingincome taxes computed at 20% and EPS disclosures assuming 500,000shares of common stock. (Amounts to be deducted should beindicated with a minus sign. Round EPS answers to 2 decimalplaces.)