The following is a partial year-end adjusted trial balance. Account Title Debits Credits Sales revenue 390,000 Loss on sale of investments 40,000 Interest revenue 8,500 Cost of goods sold 205,000 General and administrative expenses 49,000 Restructuring costs 59,000 Selling expenses 29,500 Income tax expense 0 Income tax expense has not yet been recorded. The income tax rate is 40%.

The following is a partial year-end adjusted trial balance.

Account Title	Debits	Credits
Sales revenue		390,000
Loss on sale of investments	40,000
Interest revenue		8,500
Cost of goods sold	205,000
General and administrative expenses	49,000
Restructuring costs	59,000
Selling expenses	29,500
Income tax expense	0

Income tax expense has not yet been recorded. The income tax rate is 40%.

Explanation:

a.

Sales revenue	$	390,000
Less: Cost of goods sold		(205,000	)
General and administrative expenses		(49,000	)
Restructuring costs		(59,000	)
Selling expenses		(29,500	)
Operating income	$	47,500

b.

Operating income	$	47,500
Add: Interest revenue		8,500
Deduct: Loss on sale of investments		(40,000	)
Income before income taxes	$	16,000

c.

Income before income taxes	$	16,000
Income tax expense (40%)		(6,400	)
Net income	$	9,600