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23 April, 14:30

Santos Corporation gathered the following information for the fiscal year ended December 31, 2020: Sales $1,500,000 Operating expenses 160,000 Cost of goods sold 960,000 Loss on disposal of equipment 40,000 Santos Corporation is subject to a 30% income tax rate. Prepare a partial income statement, beginning with income from operations.

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  1. 23 April, 14:51
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    Income from operations 380,000

    Loss on sale of equipment 40,000

    Pretax income 340,000

    Tax at 30% 102,000

    Net Income 238,000

    Explanation:

    1 Santos Corporation

    Income statement

    For the year ended December 31, 2020

    Sales ... $1,500,000

    less: Cost of goods sold $960,000

    Gross Profit $540,000

    Less: Operating expenses 160,000

    Income from operations 380,000

    2 Santos Corporation

    Income statement

    For the year ended December 31, 2020

    Income from operations 380,000

    Loss on sale of equipment 40,000

    Pretax income 340,000

    Tax at 30% 102,000

    Net Income 238,000
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