Robin Mackey is a business major at Southern Missouri University. Robin is struggling with an accounting homework assignment to prepare an income statement for Wambaugh Inc., an imaginary firm. Robin has decided that the following should be included in this income statement:

Costs of Goods Sold

Income Taxes Payable

Accounts Receivable

Income Expense

Earnings per Share

Loss of Discontinued Operations (net of taxes)

Net sales

Possible loss from Lawsuit

Accounts Payable

Dividends (declared by the Board of Directors)

Gain on Sale of Equipment

Salaries Payable

Selling and Administrative Expenses

Stock Dividends Distributable

Help Robin complete her homework assignment by answering the following questions:

Which of the items listed should be included in Wambaugh Inc.s income statement?

In what order should these items appear in the income statement?

Where will the remaining items appear in the financial statements? Will any of the amounts not be included in the actual financial statements? If so, explain.