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Item 5 12.5 points

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 quarter has been compiled:

Sales revenue				$	210,000
Cost of goods sold					50,000
Operating expenses:
Fixed	$	74,000
Variable		63,000			137,000

Fixed operating expenses include payments of $80,000 to an advertising firm to promote Branson through various media throughout the year. The income tax rate for Bransons level of operations in the first quarter is 20%, but management estimates the effective rate for the entire year will be 25%. Required: Prepare the income statement to be included in Bransons first quarter interim report.