You are a summer intern at the office of a local tax preparer. To test your basic knowledge of financial statements, your manager gives you the following list of accounts

LOADING...

and asks you to prepare a simple income statement using those accounts.

a. Arrange the accounts into a well-labeled income statement. Make sure you label and solve for gross profits, operating profits, and net profits before taxes.

b. Using a

35%

tax rate, calculate taxes paid and net profits after taxes.c. Assuming a dividend of

$1.15

per share with

4.27

million shares outstanding, calculate EPS and additions to retained earnings.

a. Complete the income statement, down to the net profits before taxes line, below:(Select the account names from the drop-down menus and round the amounts to two decimal places.)

	Name of Company
	Income Statement ($000,000)
1.		$
2.
	Gross profits	$
	Less: Operating expenses
3.		$
4.
5.
6.
	Total operating expense	$
	Operating profits (EBIT)	$
7.
	Net profits before taxes	$

Accounts	($000,000)
Depreciation expense	24.28
General and administrative expenses	22.96
Sales	344.54
Sales expenses	18.93
Cost of goods sold	255.88
Lease expense	3.38
Interest expense	2.57