The following selected information is taken from the records of Beckstrom Corporation.

Accounts payable
$ 35,000

Accounts receivable
65,000

Advertising expense
15,000

Cash
19,500

Supplies expense
46,000

Rent expense
10,000

Utilities expense
3,000

Income taxes (30% of income before taxes)
?

Miscellaneous expense
4,400

Owners' equity
140,000

Salaries expense
61,000

Fees (revenues)
384,000

1. Prepare an income statement for the year ended December 31, 2006. (Assume that 7,500 shares of stock are outstanding.)

2. Explain what the EPS ratio tells the reader about Beckstrom Corporation.