Presented below are selected balances for Tucker as of December 31, 2018: Cash $50,000
Administrative expenses 90,000
Selling expenses 80,000
Accumulated other comprehensive income, beginning 55,000
Net sales 540,000
Cost of goods sold 210,000
Common stock, beginning 75,000
Cash dividends declared 20,000
Unrealized loss on available-for-sale debt securities 7,000
Interest expense 10,000
Cash dividends paid 15,000
Operating income from discontinued operations (before taxes) 30,000
Retained earnings, beginning 90,000
Loss on disposal of discontinued operations (before taxes) 45,000
Effective tax rate 30%

Required:
a. Compute net income for 2020.
b. Prepare an income statement for 2018 assuming 10,000 shares of common stock were outstanding all year.

Tucker`s

Income Statement for the year end December 31, 2018

Net sales                                                                                              540,000

Cost of goods sold                                                                              (210,000)

Gross Profit                                                                                           330,000

Administrative expenses                                                   90,000

Selling expenses                                                                80,000

Unrealized loss on available-for-sale debt securities        7,000

Interest expense                                                                 10,000     (187,000)

Net Income before tax from continuing activities                              143,000

Income tax expense at 30%                                                                 (43,900)

Net Income after tax from continuing activities                                    99,100

Explanation:

Prepare the Income statement for calculation of net income. Income statement consist of Revenues/ Income and Expenses.

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