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

		2018		2017
Sales	$	4,500,000	$	3,600,000
Cost of goods sold		2,880,000		2,020,000
Administrative expenses		820,000		695,000
Selling expenses		380,000		332,000
Interest revenue		152,000		142,000
Interest expense		204,000		204,000
Loss on sale of assets of discontinued component		58,000		—

On July 1, 2018, 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, 2018,for $58,000 less than their book value. Results of operations forthe component (included in the above account balances)were as follows:

	1/1/18-9/30/18						2017
Sales		$	420,000				$	520,000
Cost of goods sold			(300,000	)				(332,000	)
Administrative expenses			(52,000	)				(42,000	)
Selling expenses			(22,000	)				(32,000	)
Operating income before taxes		$	46,000				$	114,000

In addition to the account balances above, several events occurredduring 2018 that have not yet been reflected in the aboveaccounts:

1. A fire caused $52,000 in uninsured damages to the main officebuilding. The fire was considered to be an infrequent but notunusual event.
2. Inventory that had cost $42,000 had become obsolete because acompetitor introduced a better product. The inventory was sold asscrap for $5,000.
3. Income taxes have not yet been recorded.

Required:
Prepare a multiple-step income statement for the Reed Company for2018, showing 2017 information in comparative format, includingincome taxes computed at 40% and EPS disclosures assuming 300,000shares of common stock. (Amounts to be deducted should beindicated with a minus sign. Round EPS answers to 2 decimalplaces.)
  

REED COMPANY Comparative Income Statements For the Years Ended December 31 2018 2017 Sales revenue Cost of goods sold Gross profit (loss) 0 0 Operating expenses: Administrative Selling Loss from fire damage Loss from write-down of obsoleteinventory Total operating expenses 0 0 Operating income 0 0 Other income (expense): Interest revenue Interest expense Total other expenses (net) 0 0 Income from continuing operationsbefore income taxes Income tax expense Income from continuing operations 0 0 Discontinued operations: Income (loss) from operations ofdiscontinued component Income tax benefit (expense) Income (loss) on discontinuedoperations 0 0 Net income $0 $0 Earnings per share: Income from continuing operations Discontinued operations Net income