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Selected data for the Clinks Company for 2020 are given below: Common stock--$5 par value...

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Accounting

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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 Cost of goods sold Depreciation expense Interest Revenue Loss on write-down of obsolete inventory Retained earnings (as of 12-31-19) Operating loss on discontinued Sand Division up to point of sale in 2020 Loss on disposal of Sand Division $40,000 $380,000 $55,000 $6,000 $19,000 $960,000 $12,000 $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

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