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The Income Statement shows a firm's revenues and expenses, and taxes associated with those expenses for some financial period. Where the Balance Sheet may be thought of in terms of the "left–right" orientation previously discussed, the income statement would be thought of in "top–down" terms.
| Sample Income Statement |
| Sales |
$540,000.00 |
| Cost of Goods Sold |
$319,680.00 |
| Gross Profit |
$220,320.00 |
| Selling & Administrative Expenses |
$132,300.00 |
| Earnings Before Interest & Taxes |
$88,020.00 |
| Interest |
$10,356.00 |
| Taxable Income |
$77,664.00 |
| Taxes |
$35,726.00 |
| Net Income |
$41,938.00 |
| Dividends |
$33,108.00 |
| Transfer to Retained Earnings |
$8,830.00 |
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