Question 1 Lola Inc manufactures and sells handbags and other accessories. Lola has written (what she believes to be) an Income Statement, but has asked you (her accountant) to take a look and offer your advice. Lola is a private company following ASPE and has a December 31 year end. Lola declared dividends of $50,000 on common shares and $40,000 on preferred shares during the year. Lola's tax rate is 25%. There were 5,000 common shares outstanding during 20X7 (no changes to common shares during the year. Lola Inc Income Statement (attempted by Lola, but not in good form) For the year ended December 31, 20X7 Income increasing items: Sales revenue Dividend and interest revenue Gain on sale of equipment Income on discontinued boots division Gain on FV-NI investments 1,360,000 42,000 10,000 55,000 7,000 1,474,000 Income decreasing items: Loss on restructuring of hair accessory department 34,000 Loss on sale of boots division 40,000 Cost of goods sold Selling expenses 690,000 100,000 Depreciation Administrative expenses Other expenses 160,000 63,000 48,000 1,135,000 Net income $ 339,000 Required: Draft (in good form) Lola's Income Statement for 20X7 including EPS.