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ElectroWizard Company Produces a Popular Video Game Called Destructo, Which

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Essay

ElectroWizard Company produces a popular video game called Destructo, which sells for $65. Last year ElectroWizard sold 100,000 Destructo games, each of which costs $10 to produce. ElectroWizard incurred selling and administrative expenses of $200,000 and a depreciation expense of $100,000. In addition, ElectroWizard has a $1,000,000 loan outstanding at 8%. Their tax rate is 40%. There are 400,000 common shares outstanding.
Prepare an income statement for ElectroWizard in good form (include EPS).


Definitions:

Gestalt Laws

Psychological principles that describe how humans naturally perceive objects as organized patterns and objects.

Perceptual Organization

The process by which the brain organizes sensory information to form a coherent, unified view of the world.

Subjective Contours

Perceived contours that do not exist physically. We tend to complete figures that have gaps in them by perceiving a contour as continuing along its original path.

Figure-Ground Relationships

A visual perception principle referring to the organization of visual field into objects (figures) that stand out from their surroundings (ground).

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