Chapter 7
Corporations: The Financial Statements
351
Application Questions Group B
AP-1B (
2
)
Black Light Environment Everyday (otherwise known as BLEE Inc.) has sales of $370,000 and
cost of goods sold of $100,000 for the year ended June 30, 2016. It also has salaries expense of
$75,000 and miscellaneous operating expenses of $21,000. Prepare a basic income statement
on June 30, 2016 for BLEE, taking into account income tax expense. Assume a tax rate of 31%.
AP-2B (
2
)
Venus Space Explorations, a corporation with a June 30, 2016 year end, has sales of $420,000,
selling expense of $70,000, cost of goods sold of $200,000, salaries expense of $40,000, rent
expense of $24,000 , supplies expense of $10,000, tax expense of $42,000, and basic and
diluted earnings per share of $1.50.
