The Boulton Corporation
Income Statement
For the Year Ended December 31, 2005
Revenues
Sales			$             995,137
Less: Sales Discounts			(1,900)
Less: Returns and Allowances			(20,000)
Net Sales					$         975,137
Cost of Goods Sold
Merchandise Inventory, January 1			$               72,074
Add: Purchases	$             250,000
Less: Purchase Discounts	(2,600)
Less: Returns and Allowances	(18,356)
Net Purchases			229,044
Add: Freight-in			5,731
Goods Available for Sale			306,849
Less: Merchandise Inventory, December 31			(83,562)
Cost of Goods Sold					223,287
Gross Profit (Net Sales - COGS)					$         751,850
Operating Expenses
Administrative Expenses
Rent			$               59,000
Salaries - Non-selling Personell			20,000
Utilities			20,000
Insurance			25,000
Total Administrative Expenses					124,000
Selling Expenses
Delivery Expense			$               40,000
Amortization - Automobiles			20,000
Salaries - Non-Admin Personell			100,000
Supplies Used			3,000
Total Selling Expenses					163,000
Total Operating Expenses					287,000
Operating Income (Gross Profit - Operating Expenses)					$         464,850
Non-Operating Items
Other Revenues and Gains
Interest Revenue			$                 2,900
Gain of sale of equipment			8,000
Total non-operating revenues					10,900
Other Expenses and Losses
Interest Expense			$               (3,750)
Casualty loss from vandalism			(5,000)
Total non-operating expenses					(8,750)
Total Income Before Taxes (Operating Income + Other Revenues - Other Expenses)					$         467,000
Less: Income Taxes (assume 40%)					(186,800)
Income from Continuing Operations					$         280,200
Discontinued Operations
Income from the operation of real estate division net of tax expense of $2,000			$                 3,000
Loss on the disposal of real estate division, net of tax savings of $20,000			(30,000)
Income (loss) on discontinuted operations					$           (27,000)
Income before Extraordinary Item					$         253,200
Extraordinary Items
Expropriation of Property net of tax savings of $24,000					(36,000)
Net Income					$  217,200