Understanding manufacturing financial statements Following are the income statement and schedule of cost of goods manufactured for the Smolden Company.

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Sales..... Less cost of goods sold: SMOLDEN COMPANY Income Statement For The Year Ended December 31, 1992 Beginning finished goods inventory, 1/1/92. Add cost of goods manufactured in 1992. Total goods available for sale ........ Less ending finished goods inventory, 12/31/92 Gross margin Less operating expenses: Sales salaries..... Sales commissions Advertising.... Administrative salaries Depreciation of office facilities Depreciation of office equipment Insurance Property taxes Office supplies Utilities...... Total operating expenses Net income $ 82,000 456,000 $842,300 $538,000 105,900 432,100 $410,200 $ 62,400 39,100 22,400 96,500 28,000 37,000 5,000 12,600 6,100 15,600 324,700 $ 85,500