Selected accounts from the December $31,$ Year $1,$ adjusted trial balance of the Howard Company are shown below.

Debit

Credit

Inventory, January $1,$ Year $1$ $$30,000$

Sales Revenue $$90,000$

Sales returns and allowances $3,000$

Purchases $40,000$

Freight$-$In $2,500$

Selling Expenses $14,000$

Administrative Expenses $8,000$

Bad Debt Expense $500$

Depreciation Expense: Building $1,500$

Interest Expense $2,000$

Income Tax Expense $2,200$

Dividends $2,100$

On December $31,$ Year $1$ the inventory was $$18,000.$

Required:

Prepare a Year $1$ income statement for Howard Company.

Accounts

Administrative expenses

Bad debt expense

Depreciation expense: building

Freight$-$in

Income tax expense

Interest expense

Inventory, $1/1/$Year $1$

Inventory, $12/31/$Year $1$

Purchases

Sales returns and allowances

Sales revenue

Selling expenses

Labels

December $31,$ Year $1$

For Year Ended December $31,$ Year $1$

Operating expenses

Amount Descriptions

Cost of goods available for sale

Cost of goods sold

Gross profit on sales

Income before income taxes

Income from operations

Net income

Net loss

Net sales

Total operating expenses

Prepare a Year $1$ income statement for Howard Company.

Income Statement Instructions

Howard Company

Income Statement

For Year Ended December $31,$ Year $1$

$1$

$2$

$3$

$4$ cost of goods sold

$5$

$6$

$7$

$8$

$9$

$10$

$11$

$12$

$13$

$14$

$15$

$16$

$17$

$18$

$19$

$20$

$21$

$22$