Here is the problem: Online Selected data for the Clinks Company for 2020 are given below: Common stock-$5 par value Sales, net $1,000,000 $800,000 Selling and administrative expenses $150,000 Cash dividends declared and paid $40,000 Cost of goods sold $380,000 Depreciation expense $55,000 Interest Revenue $6,000 Loss on write-down of obsolete Inventory $19.000 Retained earnings (as of 12-31-19) $960,000 Operating loss on discontinued Sand Division up to point of sale in 2020 $12,000 Loss on disposal of Sand Division $94.000 Assume the applicable federal income tax rate is 35%. All of the items of expense, revenue and loss are Included in the computation of taxable income. In addition, the company discovered that in 2019 it had erroneously charged to expense the $74.000 cost of a tract of land purchased that year and had made the same error on its tax return for 2019. Required: A. Prepare the income statement for the year 2020, B. Prepare a statement of retained earnings for the year ended December 31, 2020. D10 D E F G D> 6 7 8 B Clinks Company Income Statement For the Year Ended December 31, 2020 Net sales Cost of goods sold Gross Profit 8 Selling and administrative expenses Depreciation expense Total operating expenses 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Other revenues and expenses: Interest revenue Loss on write-down of obsolete inventory Total other revenuew and expenses Earnings before taxes Income tax Income from continuing operations Discontinued operations: Loss from operations of Sand Division (net of tax) Loss on disposal of Sand Division (net of tax) Total loss on discontinued operations Net income 35 B Clinks Company Statement of Retained Earnings For the Year Ended December 31, 2020 36 37 38 39 40 41 42 43 44 45 Retained earnings, December 31, 2019, as previously reported Prior period adjustment; correction of error in expensing land Retained earnings, December 31, 2019, as adjusted Net income for 2020 Dividends for 2020 Retained earnings, December 31, 2020 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 C4