Income-Statement-

1. Prepare an income statement and a classified statement of financial position.

The following items are taken from the financial statements of Adamato Ltd. for the year ended December 31, 2016:

Income tax expense $ 1,000

Accounts payable 19,500

Accounts receivable 4,000

Accumulated depreciation – equipment 4,800

Bonds payable 18,000

Cash 22,000

Common shares (2,500 shares issued)

25,000 Cost of goods sold

12,000 Depreciation expense 4,800

Dividends 300

Equipment 48,000

Goodwill 7,500

Interest expense 3,500

Retained earnings, beginning 16,000

Salaries expense 8,200

Sales revenue 32,500

Supplies 4,500

Market price per common share $4.50

2. Make 3 recommendations in terms of how the expenses can be managed to improve profitability