Huang Company operates with a single product. The following simple income statement relates to last year when sales units totaled 25,000.

Huang Company unit production for the year totaled 28,000.

Variable Costing GAAP Absorption Costing

Total $ Per unit $ Total $

Sales 500,000 20.00 Sales x

Variable COGS 200,000 8.00 COGS x

Variable S&A expense 50,000 2.00 Gross Margin x

Contribution margin 250,000 10.00 S&A expenses x

Fixed Man Ovrhd exp 147,000 Net operating income x

Fixed S&A expenses 42,000

Net operating income 61,000

Prepare a GAAP income statement for Huang Company. Reconcile any difference between the Variable costing and GAAP net operating incomes.