1. Income Statement Period of Time Accrual Accounting
Revenues - Expenses = Net Income
Period of Time
Accrual Accounting
Matching of Revenues to Expenses
Now for the rest of the Story
Footnotes to Statements

2. Organization of Income Statement
Operations versus Disposition of profits
Operating Profit is paid out to:
Creditors (interest)
Government (taxes)
Shareholders (Dividends & Ret. Earnings)

3. Income Statement
1998
1997
Sales
5,834,400
3,432,000
COGS
5,728,000
2,864,000
Other expenses
680,000
340,000
Deprec.
116,960
18,900
Tot. op. costs
6,524,960
3,222,900
EBIT
(690,560)
209,100
Interest exp.
176,000
62,500
EBT
(866,560)
146,600
Taxes (40%)
(346,624)
58,640
Net income
(519,936)
87,960

4. Other Data
1998
1997
No. of shares
100,000
100,000
EPS
($5.199)
$0.88
DPS
$0.110
$0.22
Stock price
$2.25
$8.50
Lease pmts
$40,000
$40,000

5. Statement of Retained Earnings (1998)
Balance of retained
earnings, 12/31/97 $203,768
Add: Net income, 1998 (519,936)
Less: Dividends paid (11,000)
earnings, 12/31/98 ($327,168)

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