Presented below is information related to Tao Corp. for the year 2015 (amounts in thousands).

Instructions

(a) Prepare an income statement for 2015. Assume that 60,000 ordinary shares are outstanding.

(b) Prepare a retained earnings statement for 2015.

Transcribed Image Text:

Net sales HK$1,200,000 Cost of goods sold 780,000 Selling expenses 65,000 Write-off of inventory due to obsolescence Depreciation expense omitted by accident in 2014 Interest expense Administrative expenses 48,000 Cash dividends declared Dividend revenue 20,000 Retained earnings at December 31, 2014 Interest revenue 7,000 Effective tax rate of 34% on all items HK$ 80,000 40,000 50,000 45,000 980,000