Charles Allen, the accountant for Road Inc., was asked to make a presentation to the board of directors concerning the corporation’s year-end financial position. While flying to the meeting on Saturday morning, Allen checked the papers in his briefcase and realized he had left the revised income statement on his desk back at the office and did not have a copy in his e-mail. Since he knew there was no one at the office to send him the document, he examined the rest of the material in his briefcase to see what information was available.
From memory, Allen recalled that net income after income taxes for the year was $375,000. From some notes he had made for the presentation, he knew that the corporation’s gross profit on sales was 40 percent and net income as a percentage of net sales was 10 percent. The income tax rate for the corporation is 25 percent. Allen also remembered that the selling and administrative expenses were the same amount. With this information, he was able to reconstruct the income statement for the corporation before the plane reached its destination.

INSTRUCTIONS
Using the same information given above, prepare an income statement for Road Inc. for the current year. To get started, first list the major headings for a condensed income statement. Then, starting with the net income figure, work to fill in the dollar amounts based on the percentage relationships given.