Question
Prepare income statement for the McGraw Corporation. McGraw Corporations physical inventory shows that ending inventory is 1,372,000 and the effective tax rate on all items
Prepare income statement for the McGraw Corporation. McGraw Corporations physical inventory shows that ending inventory is 1,372,000 and the effective tax rate on all items is 30%. The following is presented in the ledger accounts of McGraw Corporation as of December 31, 2022: Cash 370,000 Sale salaries 568,000 Merchandise inventory, beginning 1,070,000 Office salaries 692,000 Sales 8,350,000 Purchase returns 30,000 Advances from customers 234,000 Sales returns and allowances 158,000 Purchases 5,572,000 Transportation - in 144,000 Sales discounts 68,000 Account receivable 285,000 Purchases discounts 54,000 Sales commissions 166,000 Travel and entertainment - sales 138,000 Telephone - sales 34,000 Accounting and legal services 66,000 Utilities - office 64,000 Insurance expense - office 48,000 Miscellaneous office expenses 16,000 Advertising 108,000 Rental revenue 480,000 Transportation - out 186,000 Loss on sale of division 120,000 Depreciation of office equipment 96,000 Interest expense 352,000 Depreciation of sales equipment 72,000 Share capital - ordinary ($10 par) 1,800,000
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