Branson Electronics Company is a small, publicly traded company preparing its first quarter interim report...
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Accounting
Branson Electronics Company is a small, publicly traded company preparing its first quarter interim report to be mailed to shareholders. The following information for the quarter has been compiled:
Sales revenue
$
190,000
Cost of goods sold
40,000
Operating expenses:
Fixed
$
64,000
Variable
53,000
117,000
Fixed operating expenses include payments of $60,000 to an advertising firm to promote Branson through various media throughout the year. The income tax rate for Bransons level of operations in the first quarter is 20%, but management estimates the effective rate for the entire year will be 25%. Required: Prepare the income statement to be included in Bransons first quarter interim report.
BRANSON ELECTRONICS COMPANY
Income Statement
Sales revenue
Cost of goods sold
Gross profit
Advertising expense
Other operating expenses
Income before income taxes
Income tax expense
Net income
Answer & Explanation
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