Part 2 Problem:

Answer the following question on the answer sheet provided in good form (10 total points). You need to calculate Cost of Goods Sold (3 points) to complete the income statement (7 points).

BONUS Disclose the appropriate earnings per share information for the

company on the Income Statement

1. Information from the accounts of The Pumpkin Company is shown below:

Sales $8,400,000

Purchases 4,750,000

Operating expenses 1,100,000

Loss on sale of building 98,000

Operating loss from disposed component 250,000

Gain on sale of disposed component 1,100,000

Merchandise inventory, 12/31/2023 1,950,000

Merchandise inventory, 1/1/2023 2,750,000

There were 200,000 shares of common stock outstanding during the entire year.

REQUIRED:

Assuming a 28% tax rate, prepare a 2023 income statement for The Pumpkin Company in good form. Use a multi-step format.