prob028 - Problem 28 (Past exam question: 27 minutes)...

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Problem 2 8 (Past exam question: 27 minutes) (Text: Ch. 4, 5, 7,1 1) The following income statement was prepared for financial accounting purposes by Fabulus Fotos Ltd. for its fiscal year ended December 31, 2008. Fabulus Fotos Ltd. Income Statement For the Year Ended December 31, 2008 Sales $4,000,000 Cost of Sales 2,500,000 Gross profit 1,500,000 General and administrative expenses: Salaries and wages (Note 1) 600,000 Entertainment (Note 2) 20,000 Advertising (Note 3) 23,000 Travel (Note 4) 42,000 Insurance (Note 5) 5,250 Interest and bank charges (Note 6) 9,000 Legal and accounting (Note 7) 12,000 Appraisal costs (Note 8) 5,000 Amortization (Note 9) 28,000 Office (Note 10) 10,000 Bad debts 4,000 758,250 Operating income 741,750 Dividends received from taxable Canadian corporations 13,000 Interest on bank account 1,200 Gain on sale of capital asset (Note 11) 14,000 Income before income taxes $ 769,950 Notes: 1. Salaries and wages includes bonuses of $140,000 accrued at December 31, 2008. $40,000
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prob028 - Problem 28 (Past exam question: 27 minutes)...

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