(solution) Information from the accounts of Gause Company is shown below:

(solution) Information from the accounts of Gause Company is shown below:

Information from the accounts of Gause Company is shown below:

Sales

$9,000,000

Purchases

5,000,000

Operating expenses

1,100,000

Gain on sale of equipment

100,000

Gain on sale of component

1,000,000

Operating loss from disposed component

200,000

Merchandise inventory, 12/31/16

1,900,000

 The merchandise inventory on January 1, 2016, was $3,200,000. There were 250,000 shares of common stock outstanding during the entire year. Assuming a 30% income tax rate, prepare a 2016 income statement for Gause Company. Use a multiple-step format.