Remeasured income statement under temporal method:
Revenues = 1000/0.3125 = 3200
COGS = 2222 (from previous question)
Depreciation = 50/0.3333 = 150
Selling expense = 30/0.3125 = 96
Income before remeasurement gain = 3200 − 2222 − 150 − 96 = 732
Net income = 680 (= retained earnings at year end 2005 − retained earnings at year end 2004)
Remeasurement gain/loss = 680 − 732 = -52
