M Company

Income Statement

For the year ended December 31, 200x

Revenues:

Sales $400,000

Interest Revenue 35,000

Total $435,000

Costs and Expenses:

Cost of Goods Sold $145,000

Selling expenses 25,000

General and Administrative 45,000

Interest expense 10,000

Lawsuit loss for patent infringement verdict 5,000

Income Tax expense 63,200

Total $293,200

1. How much is Ms gross profit?

1. $195,000
2. $255,000
3. $275,000
4. $305,000

2. What format for the income statement is used?

1. Multiple-step
2. Single-step
3. Condensed
4. Comparative

3. How much are Ms total operating expenses?

1. $70,000
2. $80,000
3. $85,000
4. $90,000

4. How much is Ms net income?

1. $141,800
2. $195,000
3. $455,000
4. $0