Question

Exercise 169 Santos Corporation gathered the following information for the fiscal year ended December 31, 2020: Sales $1,500,000 Operating expenses 160,000 Cost of goods sold 960,000 Loss on disposal of equipment 40,000 Santos Corporation is subject to a 30% income tax rate. Prepare a partial income statement, beginning with income from operations. SANTOS CORPORATION Income Statement For the Year Ended December 31, 2020 Cost of Goods SoldOther Expenses and LossesIncome Tax ExpenseRetained Earnings, January 1Income from OperationsRetained Earnings, December 31Sales RevenueOther Revenues and GainsNet Income / (Loss)Income before Income TaxesLoss on Disposal of EquipmentTotal ExpensesTotal RevenuesDividendsExpensesGross Profit / (Loss) $ Income before Income TaxesIncome from OperationsSales RevenueLoss on Disposal of EquipmentCost of Goods SoldIncome Tax ExpenseRetained Earnings, December 31Total ExpensesDividendsGross Profit / (Loss)Other Revenues and GainsTotal RevenuesNet Income / (Loss)Other Expenses and LossesExpensesRetained Earnings, January 1 Total RevenuesIncome from OperationsLoss on Disposal of EquipmentCost of Goods SoldIncome before Income TaxesDividendsOther Expenses and LossesExpensesNet Income / (Loss)Gross Profit / (Loss)Income Tax ExpenseOther Revenues and GainsRetained Earnings, January 1Retained Earnings, December 31Sales RevenueTotal Expenses Net Income / (Loss)DividendsSales RevenueLoss on Disposal of EquipmentExpensesIncome from OperationsOther Expenses and LossesGross Profit / (Loss)Income Tax ExpenseOther Revenues and GainsIncome before Income TaxesRetained Earnings, January 1Retained Earnings, December 31Total ExpensesTotal RevenuesCost of Goods Sold Gross Profit / (Loss)Total RevenuesTotal ExpensesIncome from OperationsIncome before Income TaxesIncome Tax ExpenseOther Revenues and GainsCost of Goods SoldNet Income / (Loss)Sales RevenueLoss on Disposal of EquipmentExpensesDividendsOther Expenses and LossesRetained Earnings, January 1Retained Earnings, December 31 $ Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 1 used SAVE FOR LATER SUBMIT ANSWER

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Answer: SANTOS CORPORATION Income Statement For the Year Ended December 31, 2020 Income from Operations 380000 Loss on Disposal of Equipment 40000 Income Before Income Taxes @30% 340000 Income Tax Expense 102000 Net Income 238000 Income from Operations = Sales - Cost of Goods Sold - Operating Expenses Income from Operations = $1,500,000-$960,000 - $160,000 Income from Operations = $380,000