The ledgers of Inigo Jones Galleries Inc. contain the following balances as of December 31, 1997:

Income taxes are calculated at 30 percent of income; the galleries had 90,000 shares of common stock outstanding for the entire year. Total assets amounted to \(\$ 7,509,000\) and common stockholders' equity was \(\$ 3,975,400\)
\section*{Instructions}

(a) Prepare in good form a multistep income statement for Inigo Jones Galleries.

(b) Calculate three measures of profitability and one ratio of solvency.

(c) Assume that you are considering supplying Inigo Jones Galleries with a line of miniature replicas of fine arts sculptures for sale in its gift shops. Is this a company for which you would like to be a supplier? What additional information would you like to have before deciding to become a major supplier for Inigo Jones Galleries?

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Advertising expense Commissions expense on art sales Depreciation expense Dividend revenue Insurance expense Interest expense Inventory, January 1 Inventory, December 31 $ 126,000 1,200,000 98,000 44,000 600,000 98,000 1,650,000 1,424,000 Loss on the sale of office equipment 23,300 Miscellaneous administrative expenses 53,200 Miscellaneous selling expenses 39,000 Net Purchases 3,500,000 Net Sales Rent expense Transportation in Transportation out Utilities expense Wages and salaries 9,675,000 805,000 232,000 82,500 117,000 1,264,000