Seismic Company

Income Statement

For the year ended December 31, 2020

Net sales		$1,575,000
Costs and expenses:
Cost of goods sold	475,000
Selling, general and administrative expenses	40,000
Other expenses	25,000
Total costs and expenses		540,000
Income before income taxes		1,035,000
Income taxes		258,750
Net income		$776,250

Additional information:

1. Selling, general and administrative expenses included a loss of $19,000 due to hurricane damage. There was also a gain of $25,000 included which is a result of the state of Indiana purchasing one of their production facilities to make way for Interstate 69.

2. Other expenses consisted of:
   1. Interest expense, $5,000;
   2. Discontinued operations in the current year at a loss of $20,000 before taxes. The loss from operations of the discontinued subsidiary was $100,000 before taxes, the gain from the disposal of the subsidiary was $80,000 before taxes.

3. On January 1, 2020, Seismic changed from LIFO to FIFO inventory valuation method. The cumulative effect for years 2018 and 2019 before taxes of $75,000 results in a reduction to net income.

4. Seismic had 50,000 shares of preferred stock and 275,000 shares of common stock outstanding during 2020 and a tax rate of 25%.

5. Seismic paid a cash dividend of $16,500 in total to both classes of shareholders; $10,500 to preferred shareholders and the remainder to common shareholders.

Instructions: Using the multiple-step format, prepare a corrected income statement including the appropriate per share disclosures. The corrected income statement will NOT contain an account called other expenses.