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.

Question

Business

Mills

4 January, 12:40

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.

+4

Answers (1)

Know the Answer?

Shamar Craig · Answer 1

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