 Hello and welcome to the session. In this session we are going to discuss the following question and the question says that calculate gross profit earning before interest and taxes and net income from the given income statement. Let us start with the solution of the given question. Now here we are given the income statement of Jane's firm for the month ended on June 30. The firm's revenue is $16,235. Cost of goods sold is $7,425. Operating expenses include research expenses, legal and selling expenses. Research expenses are $845. Selling expenses are $1,225. And legal expenses are $500. There is no interest expense and income tax expense is $235. Now we first calculate gross profit. We know that gross profit is given by revenue minus cost of goods sold. Now here revenue is $16,235. And cost of goods sold is $7,425. So gross profit will be given by $16,235 minus $7,425. And this is equal to $8,810. So gross profit is given by $8,810. Now we find earning before interest and taxes. We know that earning before interest and taxes is given by revenue minus cost of goods sold minus operating expenses. And here revenue is $16,235. Cost of goods sold is $7,425. And operating expenses include research expenses, legal and selling expenses. So earning before interest and taxes will be equal to revenue that is $16,235 minus cost of goods sold that is $7,425 minus operating expenses. That is $845 plus $1,225 plus $500 the whole. And this is equal to $16,235 minus $7,425 is equal to $8,810 minus adding all these three we get $2,570. And this is equal to $6,240. So earning before interest and taxes is given by $6,240. Now we will find net income. We know that net income is given by revenue minus expenses. Now expenses include cost of goods sold, operating expenses, interest expense and income tax expense. So net income will be given by revenue minus cost of goods sold minus operating expenses minus interest expense minus income tax expense. So this is equal to $16,235 minus $7,425 minus $845 plus $1,225 plus $500 the whole. Minus zero minus $235. Now on solving this further we get $6,005. So net income of Jains firm for the month of June is $6,005. This is the required solution. This completes our session. Hope you enjoyed this session.