Answer:
<u>Sunland Inc.</u>
<u>Income statement for the year 2020</u>
Sales $1,100,000
Less Sales Discounts ($18,700)
Net Sales $1,081,300
Less Cost of goods sold ($440,000)
Gross Profit $641,300
Less Expenses
Administrative expenses ($440,000 x 20%) ($88,000)
Interest expense ($18,000)
Net Profit before tax $535,300
Income tax expense ($535,300 x 30%) ($160,590)
Net Profit after tax $374,710
Explanation:
The Income Statement shows the Profit earned during the Reporting Period. Only Revenues or Incomes and Expenses are recorded in this Statement.
Using the amount of admin expenses to fin the Gross Sales we have :
Gross Sales = 100 / 8 x $88,000 = $1,100,000
