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18. Based on the following account information, prepare a multi step statement of income. Cash: $50,000...

18. Based on the following account information, prepare a multi step statement of income.
Cash: $50,000

Prepaid expenses: $5,000
Accounts receivable: $70,000

Bad debt expense: $1,000
General and administrative expenses: $10,000

Net Sales: $900,000
Direct materials and direct labor expenses: $300,000

Selling and marketing expenses: $150,000
Income tax expense: $180,000

Interest income: $5,000
Interest receivable: $5,000

Retained earnings: $80,000
Accumulated depreciation: $5,000

Depreciation expense: $1,000

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Answer-

INCOME STATEMENT
PARTICULARS AMOUNT AMOUNT
$ $
Net Sales 900000
Less- Expenses
Direct material & direct labor expenses 300000
Bad debts expense 1000
General and administrative expenses 10000
Selling and marketing expenses 150000
Depreciation expense 5000
Total operating expenses 466000
Operating profit 434000
Add- Interest income 5000
Income from operations before income taxes 439000
Less- Income tax expense 180000
Net Income 259000
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