Explanation:
The preparation of the income statement is presented below:
Jasper Company
Income Statement
Sales $3,770,000 (290,000 × $13)
Less: Cost of goods sold -$764,000 ($150,000 + $504,000 + $110,000)
Gross margin $3,006,000
Less: Operating expenses
Selling expenses -$437,000
Administrative expenses -$860,000
Total operating expenses -$1,297,000
Net income $1,709,000
We assume that the administrative expenses is $860,000