Reference no: EM133022189
Question - Selected data for the Clinks Company for 2020 are given below:
Common stock--$5 par value $1,000,000
Sales, net $790,000
Selling and administrative expenses $150,000
Cash dividends declared and paid $40,000
Cost of goods sold $360,000
Depreciation expense $52,000
Interest Revenue $4,000
Loss on write-down of obsolete inventory $17,000
Retained earnings (as of 12-31-19) $660,000
Operating loss on discontinued Sand Division up to point of sale in 2020 $11,000
Loss on disposal of Sand Division $90,000
Assume the applicable federal income tax rate is 35%. All of the items of expense, revenue, and loss are included in the computation of taxable income. In addition, the company discovered that in 2019 it had erroneously charged to expense the $74,000 cost of a tract of land purchased that year and had made the same error on its tax return for 2019.
Required -
A. Prepare the income statement for the year 2020.
B. Prepare a statement of retained earnings for the year ended December 31, 2020.
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