Pelican Enterprises had the following account balances in its general ledger at June 30, 2004, the end of the company’s fiscal year. All adjusting entries (except for the accrual of income taxes at 30%) had been entered. The company had an average of 900,000 shares of common stock outstanding during the year.

Required
A. Prepare an income statement in good form, including earnings per share information.
B. Have the closing entries been made to the accounting system? How can you tell?
C. What is the amount of net income available to common stockholders? Why is this important information?
D. Why do you think that GAAP require that gross profit, operating income, pretax income, and net income be separatelydisclosed?

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General ledger account balances (in thousands) Accumulated depreciation Buildings and equipment Cost of goods sold Extraordin $1,980 922 1,224 4,811 482 2,400 Loss on sale of old machinery Merchandise inventory Notes payable, long-term Preferred stock, 7% Prepaid advertising extinguishment of debt 4 Investments, long-term revenue expense 124 Wages payable