An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years. SIMON COMPANY Income Statement For the Year Ended December 31, 2017 Revenues Net sales $850,000 Other revenues 22,000 872,000 Cost of goods sold 555,000 Gross profit 317,000 Operating expenses Selling expenses 109,000 Administrative expenses 103,000 212,000 Net earnings $105,000 As an experienced, knowledgeable accountant,

you review the statement and determine the following facts: Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.

Other revenues consist of sales discounts $18,000 and rent revenue $4,000.

Selling expenses consist of salespersons' salaries $80,000, depreciation on equipment $10,000,

advertising $13,000, and sales commissions $6,000.

The commissions represent commissions paid. At December 21,

$3,000 of commissions have been earned by salespersons but have not been paid.

All compensation should be recorded as Salaries and Wages Expense.

Administrative expenses consist of office salaries $17,000, dividends $18,000,

utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.

a detailed multi-step income statement with a brief explanation Assume a 25% tax rate.