P4-3    IDENTIFYING AND CORRECTING ERRORS Obj.2     |N AN  INCOME STATEMENT
Just after preparing the adjusting entries for the year, the long-time controller at Parrot Company took a leave of absence. Her inexperienced assistant did his best to prepare financial statements from the information the controller had left behind. He had particular difficulty with the income statement.
The item labeled sales expense is the sum of the amounts charged customers during the year for goods and services provided.

Income Statement December 31,2007

$260,722
102,690
$158,032
$59,780
9,002
14,420
13,510
97,712
$  60,320
9,968
$  50,352
13,150 $ 63,502
$4.30
Sales expense 
Cost of goods sold 
Net profit 
Operating expenses:
Wages
Utilities
Interest
Depreciation 
Total operating expense 
Operating income 
Advertising expense 
Pretax income 
Income tax expense 
Net income 
Earnings per share of common stock
($64,502 + 15,000 shares)