On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: 
a) Prepare an income statement using absorption costing.
b) Prepare an income statement using variable costing.
Definitions:
Income and Loss Sharing
A method of distributing profits and losses among business partners or investors according to a pre-agreed ratio.
Noncash Assets
Assets that cannot be easily converted into cash, such as property, equipment, and investments.
Liquidated
The process of converting assets into cash or cash equivalents by selling them on the open market.
Personal Assets
Assets owned by an individual, including both tangible items like real estate and cars, and intangible items like investments and patents.
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