The following income statement for Curbstone Company was prepared for the year ended August 31, 2018:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,595,000
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,110,000
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,485,000
Expenses: .................................................................................................
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $800,000 ................
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 575,000 ................
Delivery expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425,000 ................
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,800,000
..................................................................................................$ 685,000
Other expense: ..........................................................................................
Interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 640,000
a. Identify the errors in the income statement.
b. Prepare a corrected income statement.