An inexperienced accountant prepared this condensed income statement for Hight Company, a retail firm that has been in business for a number of years.
HIGHT COMPANY
Income Statement
For the Year Ended December 31, 2010
Revenues
Net sales ............ $850,000
Other revenues ........... 22,000
872,000
Cost of goods sold......... 555,000
Gross profit ........... 317,000
Operating expenses
Selling expenses ......... 109,000
Administrative expenses ...... 103,000
212,000
Net earnings ............ $105,000
As an experienced, knowledgeable accountant, you review the statement and determine the following facts.
1. Net sales consist of sales $911,000, less delivery expense on merchandise sold $31,000, and sales returns and allowances $30,000.
2. Other revenues consist of sales discounts $14,000 and rent revenue $8,000.
3. Selling expenses consist of salespersons’ salaries $80,000; depreciation on accounting equipment $8,000; advertising $15,000; and sales commissions $6,000. The commissions represent commissions paid. At December 31, $3,000 of commissions have been earned by salespersons but have not been paid.
4. Administrative expenses consist of office salaries $47,000; dividends $18,000; utilities $12,000; interest expense $2,000; and rent expense $24,000, which includes prepayments totaling $4,000 for the first quarter of 2011.

Instructions
Prepare a correct detailed multiple-step income statement. Assume a 25% tax rate.