=+$1,688,400 $1,464,600 __________ __________ __________ __________ The income statement for the year ended December 31, 2011, is as follows:

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,990,000 Cost of merchandise sold . . . . . . . . . . . . . . . . . . . 1,226,000 __________ Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,764,000 Operating expenses:

Depreciation expense . . . . . . . . . . . . . . . . . . . . $ 22,000 Other operating expenses . . . . . . . . . . . . . . . . . 1,550,000 __________ Total operating expenses . . . . . . . . . . . . . . . . 1,572,000 __________ Operating income . . . . . . . . . . . . . . . . . . . . . . . . . $ 192,000 Other expense:

Loss on sale of investments . . . . . . . . . . . . . . (32,000) __________ Income before income tax . . . . . . . . . . . . . . . . . . . $ 160,000 Income tax expense . . . . . . . . . . . . . . . . . . . . . . . 51,400 __________ Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,600 __________ __________