Information from the accounts of Gause Company is shown below:Sales$9,000,000Purchases5,000,000Operating expenses1,100,000Gain on sale of equipment100,000Gain on sale of component1,000,000Operating loss from disposed component200,000Merchandise inventory, 12/31/201,900,000 The merchandise inventory on January 1, 2020, was $3,200,000. There were 250,000 shares of common stock outstanding during the entire year.Required: Assuming a 30% income tax rate, prepare a 2020 income statement for Gause Company. Use a multiple-step format.

Answered: Required: Assuming a 30% income tax…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Information from the accounts of Gause Company is shown below:

Sales	$9,000,000
Purchases	5,000,000
Operating expenses	1,100,000
Gain on sale of equipment	100,000
Gain on sale of component	1,000,000
Operating loss from disposed component	200,000
Merchandise inventory, 12/31/20	1,900,000

The merchandise inventory on January 1, 2020, was $3,200,000. There were 250,000 shares of common stock outstanding during the entire year.

Required:

Assuming a 30% income tax rate, prepare a 2020 income statement for Gause Company. Use a multiple-step format.

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