Problem:
Home Realty Incorporated, has been operating for three years and is owned by three investors. J. Doe owns 60 percent of the total outstanding stock of 9,000 shares and is the managing executive in charge. On December 31, 2007, the following financial items for the entire year were determined: sales revenue earned and collected in cash, $150,000, plus $16,000 not yet collected; selling expenses paid, $97,000; interest expense paid, $5,775 (not including December interest of $525 yet to be paid); promotion and advertising expenses paid, $9,025; and income tax expense paid, $18,500. There were no other unpaid expenses at December 31. Also during the year, the company declared and paid the owners dividends amounting to $12,000. Complete the following income statement:
- Revenues
- Sales revenue
- Expenses
- Selling expenses
- Interest expense
- Promotion and advertising expenses
- Income tax expense
- Total expenses
- Net income