Fremont Corporation had several unusual transactions during 1990 and has prepared the following list of trial balance items from which the appropriate items should be selected and used in constructing the 1990 income statement for the company.

\section*{Required}
Prepare Fremont Corporation's income statement for 1990, excluding the earnings per share statistics.

Transcribed Image Text:

Debit Credit Loss on sale of antique automobile displayed in company showroom (an unusual transaction for the company that occurs about once every four years when a new customer attraction is obtained) Cost of goods sold Gain on settlement with supplier to compensate for negative customer reaction to receipt of products with faulty materials Fremont had purchased from the supplier. (In this industry, attempts to obtain such settlements with suppliers are not unusual but occur very infrequently.) $ 27,900 170,400 $ 46,800 Income tax expense. 71,250 Loss from operating Preuss Division (net of $11,700 income tax benefit) 29,250 Revenue received in advance late last year and incorrectly credited to a revenue account instead of a liability account (net of $9,750 income taxes). Depreciation expense. 23,550 28,350 Gain on sale of investment in stock (Fremont regularly maintains a large portfolio of stock investments as part of its business activities, expecting to enhance the earnings of the company through purchases and sales of such securities.).. Accumulated depreciation, buildings Effect on prior years' income of switching from straight-line depreciation to declining-balanc depreciation, justified in this case as an improvement in financial reporting (net of $32,000 income taxes) Other operating expenses. Loss on sale of Preuss Division (net of $17,100 income taxes). Interest earned. Gain on condemnation of land by city. This is probably the only time in the company's past or future that it will have land condemned by a government. The event is highly unusual. (net of $39,000 income taxes) Sales.. Accrued liabilities. 85,350 76,500 91,650 140,850 40,950 10,800 136,500 569,400 48.000