A part-time bookkeeper prepared this income statement for Tao Company for the year ending December 31, 1998:

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:
1. Sales include \(\$ 10,000\) of deposits from customers for future sales orders.
2. Other revenues contain two items: interest expense \(\$ 4,000\) and interest revenue \(\$ 5,300\).
3. Selling expenses consist of sales salaries \(\$ 76,000\), advertising \(\$ 10,000\), depreciation on store equipment \(\$ 7,500\), and sales commissions expense \(\$ 6,500\).
4. Administrative expenses consist of office salaries \(\$ 19,000\); utilities expense \(\$ 8,000\); rent expense \(\$ 16,000\); and insurance expense \(\$ 7,000\). Insurance expense includes \(\$ 1,200\) of insurance applicable to 1999 .
\section*{Instructions}
Prepare a correct detailed multiple-step income statement.

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Revenues TAO COMPANY Income Statement December 31, 1998 Sales $702,000 Less: Freight-out $10,000 Sales discounts 11,300 21,300 Net sales 680,700 Other revenues (net) 1,300 Total revenues 682,000 Expenses Cost of goods sold Selling expenses Administrative expenses Dividends Total expenses Net income 470,000 100,000 50,000 12,000 632,000 $ 50,000