Answer:
Sales revenue 1,300,000
COGS                780,000
Gross Profit       520,000
Operating expense
Selling expenses              65,000
Administrative expenses 48,000
Write-off of inventory due to obsolescence 80,000
              total operating expense   193,000
Operating Income                           327,000
Non-operating income:
Dividend revenue 20,000
Interest revenue      7,000
Casualty loss       (50,000)
 non-operating    (23,000)
income before taxes                   304,000
income tax expense 20%        <u>    (60,800) </u>
Net Income                                  243,200
earnings per share: 243,200 / 60,000 =  4,05
Explanation:
we subtract form the revenues the expenses.
we made the distinction between opeating activities andthose which aren't.
The prior period adjustment is done directly to retained earnings it do not imapct the current period as if does, it will be a violation of the matching principles to recognie expense of 2019 in 2020.