Snap Fasteners Inc. experienced the following transactions during the year ended December 31, 2020:

a. All other expenses, excluding income taxes, totalled \(\$ 14.9\) million for the year. Income tax expense was \(35 \%\) of income before tax.

b. Snap has several operating divisions. Each division is accounted for separately to show how well each division is performing. However, Snap's financial statements combine the statements of all the divisions to report on the company as a whole.

c. Inflation affects Snap's cost to manufacture goods. If Snap's financial statements were to show the effects of inflation, assume the company's reported net income would drop by \(\$ 0.250\) million.

d. If Snap were to go out of business, the sale of its assets might bring in over \(\$ 5\) million in cash.

e. Snap sold products for \(\$ 56.2\) million. Company management believes that the value of these products is approximately \(\$ 60.5\) million.

f. It cost Snap \(\$ 40.0\) million to manufacture the products it sold. If Snap had purchased the products instead of manufacturing them, Snap's cost would have been \(\$ 43.0\) million.

{Requirements}

1. Prepare Snap's income statement for the year ended December 31, 2020 2. For items a through \(f\), identify the accounting concepts, assumptions, or principles that determined how you accounted for the item described. State how you have applied the concept, assumption, or principle in preparing Snap's income statement.