Emerging Enterprises Corporation's capital structure consists of 40,000 common shares. At December 31, 2016 an analysis of the accounts and discussions with company officials revealed the following information:

   Sales       $2,400,000

   Purchase discounts       36,000

   Purchases       1,440,000

   Earthquake loss (net of $36,000 tax)        84,000

   Selling expenses       256,000

   Cash       120,000

   Accounts receivable       180,000

   Common shares       400,000

   Accumulated depreciation       360,000

   Dividend revenue       36,000

   Inventory, January 1, 2016       304,000

   Inventory, December 31, 2016       250,000

   Unearned service revenue       8,800

   Accrued interest payable       2,000

   Land       740,000

   Patents       200,000

   Retained earnings, January 1, 2016       540,000

   Interest expense       34,000

   Cumulative effect of change from straight-line to accelerated

   depreciation (net of $30,000 tax)       70,000

   General and administrative expenses       320,000

   Dividends declared       58,000

   Allowance for doubtful accounts       10,000

   Notes payable (maturity July 1, 2017)       400,000

   Machinery and equipment       900,000

   Materials and supplies       80,000

   Accounts payable       120,000

Accumulated other comprehensive income, January 1, 2016 …… 130,000

The assistant has not yet made entries for the following:

   Depreciation expense (80% selling and 20% administration)………..120,000

   Supplies expense (70% administration, 30% selling) ………………… 40,000

Unrealized gain FV-NI investments ……………………………………. 30,000

   Unrealized gain FV-OCI investments …………………………………. 130,000

Unless indicated otherwise, you may assume a 30% income tax rate.

Instructions

a) Prepare, in good form, a multiple-step income statement. Show Earnings per share.

b) Prepare, in good form, a partial statement of Changes in Shareholder’s equity that includes columns for retained earnings and Accumulated other comprehensive income (AOCI).