Multiple-step income statement OBJ. 3 Identify the errors in the following income statement:

Curbstone Company Income Statement For the Year Ended August 31, 2016 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,595,000 Cost of merchandise sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,110,000 Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,485,000 Expenses:

Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 800,000 Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575,000 Delivery expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,000 Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000

$ 685,000 Other expense:

Interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 640,000