INCOME STATEMENT 1. Sales - found in your instructions; you've been working with these numbers right along (500,000 700,000 400,000). 2. Depreciation - Because depreciation is a noncash expense the $14,000/month of depreciation expense is not found in your schedules; it first appears on your income statement as $42,000 total for the quarter. 3. Your check figure for net income is $175,820.

5. Income statement: Income Statement For the Quarter Ended March 31 Sales Cost of goods sold: Beginning inventory (Given) Add purchases (Part 2) Goods available for sale Ending inventory (Part 2) Gross margin Selling and administrative expenses: Salaries and wages (Part 3) Advertising (Part 3) Shipping (Part 3) Depreciation ($14,000 x 3) Other expenses (Part 3) Net operating income Interest expense (Part 4) Net income 5. Income statement: Income Statement For the Quarter Ended March 31 Sales Cost of goods sold: Beginning inventory (Given) Add purchases (Part 2) Goods available for sale Ending inventory (Part 2) Gross margin Selling and administrative expenses: Salaries and wages (Part 3) Advertising (Part 3) Shipping (Part 3) Depreciation ($14,000 x 3) Other expenses (Part 3) Net operating income Interest expense (Part 4) Net income