(Condensed Income Statement—Periodic Inventory Method) Presented below are selected ledger accounts of Spock Corporation at December 31, 2004.

Spock’s effective tax rate on all items is 34%. A physical inventory indicates that the ending inventory is $686,000.
Instructions Prepare a condensed 2004 income statement for Spock Corporation.

Merchandise inventory Cash Sales Advances from customers $ 185,000 535,000 Travel and entertainment $ 69,000 Accounting and legal services 33,000 4,275,000 Insurance expense 24,000 117,000 Advertising 54,000 Purchases 2,786,000 Transportation-out 93,000 Sales discounts 34,000 Depreciation of office equipment 48,000 Purchase discounts 27,000 Depreciation of sales equipment 36,000 Sales salaries 284,000 Telephone-sales 17,000 Office salaries 346,000 Utilities-office 32,000 Purchase returns 15,000 Miscellaneous office expenses 8,000 Sales returns 79,000 Rental revenue 240,000 Transportation-in 72,000 Extraordinary loss (before tax) 70,000 Accounts receivable 142,500 Interest expense 176,000 Sales commissions 83,000 Common stock ($10 par) 900,000