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Problem - 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 first quarter has been compiled:
Revenues $180,000
Cost of Goods Sold 35,000
Operating Expenses:
Fixed $59,000
Variable $48,000
(Total) $107,000
Fixed operating expenses include payments of $50,000 to an advertising firm to promote the firm through various media throughout the year. The income tax rate for the firm's level of operations in the first quarter is 30%, but management estimates that the effective rate for the entire year will be 36%.
Required: Prepare the income statement to be included in Branson's first quarter interim report.
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