Prepare an income statement using the information given below. Make su

Prepare an income statement using the information given below. Make sure to identify gross profit, operating
income, and net income.

Inventories $50,000
Cost of Goods Sold $250,000
Administrative Expenses $50,000
Accumulated Depreciation $150,000
Sales $600,000
Depreciation Expense $25,000
Selling Expenses $150,000
Common Stock Dividends $8,000
Interest Expense $8,000
Corporate Tax Rate 40%

ANSWER

Sales $600,000
Cost of Goods Sold 250,000
Gross Profit 350,000
Selling Expenses 150,000
Administrative Expenses 50,000
Depreciation Expense 25,000
Operating Income (EBIT) 125,000
Interest Expense 8,000
Earnings Before Taxes (EBT) 117,000
Taxes (40%) 46,800
Net Income $70,200