Corrected Income StatementA newly hired staff accountant prepared the pre-audit income statement of Jericho Recreation Incorporated for the year ending December 31, 2008.Net revenues $797,000Cost of goods sold 300,800Gross profit $496,200Expenses:Sales salaries and commissions $160,000Officersâ€™ and office salaries 210,000Depreciation 56,000Advertising expense 13,400Other general and administrative expenses38,80478,200Income from continuing operations $18,000Discontinued operations:Gain on disposal of business segment 40,000Income before income taxes $58,000Income taxes (30%) 17,400Net income $40,600Earnings per common share (10,000 shares outstanding)$406.00The following information was obtained by Jerichoâ€™s independent auditor.(a) Net revenues in the income statement included the following items.Sales returns and allowances $ 9,500Interest revenue 6,600Interest expense 10,600Loss on sale of short-term investment 3,000Extraordinary gain 16,000(b) Of the total depreciation expense reported in the income statement, 60% relates to stores and store equipment, 40% to office building and equipment.(c) At the beginning of 2008, management decided to close one of Jerichoâ€™s retail stores. Jericho is a large company and does not attempt to prepare complete financial reports for each individual store. The inventory and equipment were moved to another Jericho store, and the land and building were sold on July 1, 2008, at a pretax gain of $40,000.This amount has been reported under discontinued operations.(d) The income tax rate is 30%.Instructions:Prepare a corrected multiple-step income statement for the year ended December 31, 2008.