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WEST TEXAS GUITAR COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 20 Cost of goods sold 225,000 90,000 50,000 . 144,000 16,000 28,000 34,600 Dividends declared on capital stock . . .. . . . . . . . . . . . . . . 46,000 $(1,367,400) $ (67,400) You are asked to help management prepare a corrected income statement for the first year of operations. Management informs you that 60 percent of the rent, insurance, and utilities applies to factory operations, and that the remaining 40 percent should be classified as period expenses Also, the correct ending inventories are as follows