Prepare an Income Statement. The following information is available from the accounting records of Sammy Co. for the year ended December 31, 2004:

Selling, general, and administrative expenses ....................................................................35,000

Accounts payable ................................................................................................................85,000

Extraordinary loss from early retirement of bonds, net of tax expense of $30,000 ............98,000

Research and development expenses ...................................................................................15,000

Gain from discontinued operations net of tax savings of $10,000 ......................................16,000

Provision for income taxes ..................................................................................................64,000

Net sales .............................................................................................................................625,000

Interest expense....................................................................................................................55,000

Net cash provided by operations .......................................................................................168,000

Cost of goods sold..............................................................................................................239,000

Required:

a. Prepare a properly formatted Income Statement for Sammy Co

b. Write a 350-500-word paper describing how the items from the income statement will impact the balance sheet