Exercise 3.3 • Income Statement Based on the following information, prepare an income statement. Note: Some of the information provided is not needed. Sales $300,000 Sales returns $ 50,000 Finished goods inventory (beginning) $ 30,000 Finished goods inventory (ending) $ 25,000 Materials used $ 70,000 Factory labor $ 45,000 Manufacturing overhead $ 30,000 Work in process (BI) $ 11,000 Work in process (EI) $ 5,000 Cash $ 40,000 Selling expenses $ 35,000 General and administrative expenses $ 25,000 Accounts receivable $ 15,000

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EXPERT ANSWER

Income statement :

Net income is $ 34,000

* Cost of sales

Cash and accounts receivable are balance sheet items, will included in neither income statement nor cost of sales statement.