## Income Statement:

An income statement is a financial statement that determines the financial performance of the firm for a given fiscal period. The main purpose of the income statement is to list out the necessary expenses that were needed to generate revenue and also list the sales revenue and other income. The net income is the excess of the revenues over the costs and expenses.

Answer: Jonstone Nurseries, Inc's costs incurred for the last year is $136,350. Explanation: Jonstone Nurseries, Inc. has the following data: • Depreciation expense =$31,300
• Sales = $212,000 • Addition to retained earnings =$18,405
• Interest expense = $5,100 • Dividends =$7,500
• Tax rate = 34%

Computation:

The first step is to determine the net income:

• Net income = Additions to retained earnings + Dividends paid
• Net income = $18,405 +$7,500
• Net income = $25,905 The second step is to determine the earnings before taxes (EBT): • EBT = Net income / (1 - Tax rate) • EBT =$25,905 / (1 - 0.34)
• EBT = $39,250 The third step is to determine the earnings before interest and taxes (EBIT): • EBIT = EBT + Interest expense • EBIT =$39,250 + $5,100 • EBIT =$44,350

The third step is to determine the earnings before interest, taxes, depreciation and amortization (EBITDA):

• EBITDA = EBIT + Depreciation expense
• EBITDA = $44,350 +$31,300
• EBITDA = $75,650 The final step is to determine the total costs: • EBITDA = Sales - Costs • Costs =$212,000 - $75,650 • Costs =$136,350 