$1.$ Prepare a multiple$-$step income statement. Enter account decreases and outflows as negative amounts.

Prescott Inc.

Income Statement

For the Year Ended September $30,20$Y$8$

Line Item Description Amount Amount Amount

Sales

$Sales

$8,917,500$

Cost of goods sold

Cost of goods sold

$5,437,500$

Gross profit

$Gross profit

$3,480,000$

Operating expenses:

Selling expenses:

Sales salaries expense

$Sales salaries expense

$972,000$

Advertising expense

Advertising expense

$114,750$

Depreciation expense$-$store equipment

Depreciation expense$-$store equipment

$20,750$

Miscellaneous selling expense

Miscellaneous selling expense

$5,000$

Total selling expenses $Total selling expenses

$1,112,500$

Administrative expenses:

Office salaries expense

$Office salaries expense

$193,500$

Rent expense

Rent expense

$99,750$

Insurance expense

Insurance expense

$57,375$

Depreciation expense$-$office equipment

Depreciation expense$-$office equipment

$40,500$

Office supplies expense

Office supplies expense

$4,125$

Miscellaneous administrative expense

Miscellaneous administrative expense

$4,750$

Total administrative expenses Total administrative expenses

$400,000$

Total operating expenses Total operating expenses

$1,512,500$

Operating income

$Operating income

$1,967,500$

Other expense:

what is the

Interest expense

Interest expense

Net income

$Net income