Presented below is information related to Tao Ltd. for the year 2022 (amounts in thousands).

Instructions

a. Prepare an income statement for 2022. Assume that 60,000 ordinary shares are outstanding.

b. Prepare a retained earnings statement for 2022.

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Net sales Write-off of inventory due to HK$1,200,000 obsolescence HK$ 80,000 Cost of goods sold Depreciation expense omitted by 780,000 accident in 2021 40,000 Selling expenses 65,000 Interest expense 50,000 Administrative Cash dividends declared expenses 48,000 45,000 Dividend revenue 20,000 Retained earnings at December 31, 2021 980,000 Interest revenue 7,000 Effective tax rate of 34% on all items