Respuesta :
Answer and Explanation:
The preparation of the income statement is presented below:
                   Equinox Products Inc.
                    Income Statement
           For the Year Ended December 31, 20Y8
Sales                                           $5,313,000
Less: Cost of goods sold                          -3,700,000
Gross profit                                    $1,613,000
Less:
Operating expenses:
Selling expenses:
Sales salaries expense      $385,000
Sales commissions         $185,000
Advertising expense        $150,000
Depreciation expense-
store buildings and equipment $100,000
Delivery expense $30,000
Store supplies expense $21,000
Miscellaneous selling expense $14,000
Total  -$885,000
Less:
Administrative expenses:
Office salaries expense $170,000
Office rent expense $50,000
Depreciation expense - office buildings and equipment $30,000
Office supplies expense $10,000
Miscellaneous administrative expense $7,500
Total $267,500
Total operating expenses                             $-1,152,500
Operating income                                    $460,500
Other revenue and expense:
Interest revenue $30,000
Less: Interest expense -$21,000
Income before income tax                              $469,500
Less: Income tax                                      -$140,500
Net income                                            $329,000
We simply deduct the all expenses and add all revenues so that the net income could come
