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 (pictured) 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 21% tax rate, calculate taxes paid and net profits after taxes.

c. Assuming a dividend of $1.14 per share with 4.29 million shares outstanding, calculate EPS and additions to retained earnings.

(Round amount answers to two decimal places)

($000,000) . 24.35 Accounts Depreciation expense General and administrative expenses Sales Sales expenses Cost of goods sold Lease expense Interest expense 21.23 344.86 17.07 255.47 3.34 3.76 Name of Company Income Statement ($000,000) Gross profits Less: Operating expenses Total operating expense Operating profits (EBIT) 7. Net profits before taxes