Powersoft Company is engaged in developing computer software for the small business and home computer market. Most of the computer programmers are involved in developmental work designed to produce software that will perform fairly specific tasks in a user-friendly manner. Extensive testing of the working model is performed before it is released to production for preparation of masters and further testing. As a result of careful preparation, Powersoft has produced several products that have been very successful in the marketplace. The following costs were incurred during 2013:

Salaries and wages of programmers doing research . . . . . . . . . . . . . . . . . . .. . . . . $265,000

Expenses related to projects prior to establishment of technological feasibility . . . . 82,200

Expenses related to projects after technological feasibility has been established

but before software is available for production. . . . . . . . . . . . . . . . . . . . . . . . . ... . . . 53,800

Amortization of capitalized software development costs from current and

prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . 32,150

Costs to produce and prepare software for sale . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 49,800

Additional data for 2013:

Sales of products for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $675,000

Beginning inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155,000

Portion of goods available for sale sold during year . . . . . . . . . .. . . . . . . . . . . . . . . . . . 60%

Instructions: Prepare an income statement for Power soft for the year 2013. Income tax rate is 30%.