An inexperienced accountant prepared this condensed income statement for Zambrana Company, a retail firm that has been in business for a number of years.

As an experienced, knowledgeable accountant, you review the statement and determine the following facts:
1. Net sales consist of sales \(\$ 800,000\), less delivery expense on merchandise sold \(\$ 30,000\), and sales returns and allowances \(\$ 30,000\).
2. Other revenues consist of sales discounts \(\$ 16,000\) and rent revenue \(\$ 8,000\).
3. Selling expenses consist of salespersons' salaries \(\$ 80,000\); depreciation on accounting equipment \(\$ 8,000\); advertising \(\$ 10,000\); and sales commissions \(\$ 6,000\). The commissions represent commissions paid. At December 31, \(\$ 4,000\) of commissions have been earned by salespersons but have not been paid.
4. Administrative expenses consist of office salaries \(\$ 27,000\); dividends \(\$ 4,000\); utilities \(\$ 12,000\); interest expense \(\$ 2,000\); and rent \(\$ 24,000\), which includes prepayments totaling \(\$ 6,000\) for the first quarter of 1999 .
\section*{Instructions}
Prepare a correct detailed multiple-step income statement.

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ZAMBRANA COMPANY Income Statement For the Year Ended December 31, 1998 Revenues Net sales $740,000 Other revenues 24,000 764,000 Cost of goods sold 555,000 Gross profit 209,000 Operating expenses Selling expenses 104,000 Administrative expenses 69,000 173,000 Net earnings $ 36,000