Income Statement The income statement is a financial report summarizing a firm's revenue and expenses for a period. It is prepared in 2 main steps: 1. Start with total revenue, and subtract cost of goods sold to calculate gross margin. 2. Subtract total expenses from gross margin to calculate net profit. The report is typically broken into 3 sections. The top section shows the total revenue, cost of goods sold, and gross margin. This section captures revenues and costs that vary with unit sales. The middle section lists all expenses connected with marketing the product and shows the total expenses. A budget is set for these expenses each period, and they do not vary with the number of units sold. The last section, the bottom line, shows the net profit or loss. Your task is to create an income statement for a company that had the following results last period. Use the outline provided to assist you. For this assignment, you will be using the following results. Item Value Units Sold 100,000 Unit Cost $40 Price $90 Advertising $1,500,000 Consumer Promotion $1,800,000 Personal Selling 5 salespeople @ $80k each Dealer Promotion $1,200,000 Product Development $700,000 Using the template on the next page, create an income statement for a company that had the results listed above. Item Value Note Revenue units sold price Cost of Goods Sold units sold x unit cost Gross Margin revenue cost of goods sold expense expense expense expense expense Total Expenses sum of expenses Net Profit gross margin-total expenses