PowerCorporation performs year-end planning in October of each year before its calendar year ends in December. The preliminary estimated net income is $2,760,000. The CFO meets with the company president to review the projected numbers. She presents the following projected information:

POWERCORPORATION PROJECTED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2025
Sales				$45,000,000
Cost of goods sold		$26,000,000
Depreciation		2,800,000
Operating expenses		11,600,000		40,400,000
Income before income tax				4,600,000
Income tax				1,840,000
Net income				$2,760,000

POWERCORPORATION SELECTED BALANCE SHEET INFORMATION AT DECEMBER 31, 2025
Estimated cash balance		$2,000,000
Available-for-sale securities (at cost)		6,000,000
Fair value adjustment (1/1/25)		1,400,000

Estimated market value at December 31, 2025:

Security		Cost		Estimated Market
A		$2,000,000		$2,800,000
C		3,000,000		4,000,000
J		1,000,000		800,000
Total		$6,000,000		$7,600,000

Other information at December 31, 2025:

Equipment		$8,000,000
Accumulated depreciation (5-year SL)		3,400,000
New robotic equipment (purchased 1/1/25)		3,000,000
Accumulated depreciation (5-year DDB)		1,200,000

The corporation has never used robotic equipment before, and the CFO assumed an accelerated method because of the rapidly changing technology in robotic equipment. The company normally uses straight-line depreciation for production equipment. The president explains to the CFO that it is important for the corporation to show a $5,000,000income before taxes because the president receives a $1,000,000bonus if the Income before Taxes and Bonus reaches $5,000,000. The president also does not want the company to pay more than $1,800,000in income taxes to the government. (a)What can the CFO do within GAAP to accommodate the president's wishes to achieve $5,000,000in Income before Taxes and Bonus? Present the revised income statement based on your decision.

POWERCORPORATION Projected Income Statement choose the accounting period December 31, 2025For the Quarter Ended December 31, 2025For the Year Ended December 31, 2025
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				$enter a dollar amount
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain		$enter a dollar amount
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain		enter a dollar amount
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain		enter a dollar amount
				enter a subtotal of the three previous amounts
select a summarizing line for the first part Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				$enter a total amount for the first part
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				enter a dollar amount
select a summarizing line for the second part Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				$enter a total amount for the second part
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				enter a dollar amount
select a summarizing line for the third part Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				$enter a total amount for the third part
select an opening section name Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain		$enter a dollar amount
select an income statement item Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain		enter a dollar amount
				enter a subtotal of the two previous amounts
select a closing name for this statement Cost of Goods SoldCurrentDeferredDepreciation ExpenseIncome before Income TaxesIncome before Taxes and BonusIncome from OperationsInterest RevenueIncome TaxesNet Income/(Loss)Operating ExpensesPresident's BonusSalesUnrealized Holding Gain				$enter a total net income or loss amount