Reference no: EM132544473

LM Company's December 31, 2020 unadjusted trial balance reported the following accounts:

Accounts Payable ............ $37,000
Accounts Receivable ......... $61,000
Accumulated Depreciation .... $33,000
Cash ........................ $20,000
Common Stock ................ $54,000
Cost of Goods Sold .......... $47,000
Equipment ................... $71,000
Income Tax Expense .......... $12,000
Interest Expense ............ $16,000
Inventory ................... $70,000
Investment Revenue .......... $56,000
Mortgage Payable ............ $40,000
Prepaid Insurance ........... $26,000
Retained Earnings ........... $42,000 (at January 1, 2020)
Sales Revenue ............... $95,000
Trademark ................... $22,000
Unearned Revenue ............ $19,000
Wage Expense ................ $31,000

• LM Company has not yet recorded an adjusting entry to record $7,000 of depreciation on the equipment.

Question 1: Calculate the amount of net income that LM Company would report in its 2020 income statement after the appropriate adjusting entry is made to record the depreciation.