Comparative Income Statements for Jameson Inc Required
the President and Management Believe That the Company Performed

question 136

Essay

Comparative income statements for Jameson Inc.are as follows:

$\begin{array}{|l|r|r|}\hline &{\mathbf{2 0 1 8}} &{\mathbf{2 0 1 7}} \\\hline \text { Sales } & \$ 2,000,000 & \$ 600,000 \\\hline \text { Cost of sales } & 800,000 & \underline{400,000} \\\hline \text { Gross profit } & \$ 1,200,000 & \$ 200,000 \\\hline \text { Operating expenses } & 520,000 & \underline{120,000} \\\hline \text { Operating income } & \$ 680,000 & \$ 80,000 \\\hline \text { Loss on sale of subsidiary } & (800,000) & 0 \\\hline \text { Net income (loss) } & \$(120,000) & \$ 80,000 \\\hline\end{array}$ Required
The president and management believe that the company performed better in 2018 than it did in 2017.Write the president's letter to be included in the 2018 annual report.Explain why the company is financially sound and why shareholders should not be alarmed by the $120,000 loss in a year when gross profit increased significantly.

---

Definitions:

Fever

An increase in body temperature above the normal range, usually indicating an underlying infection or disease.

Palpation

A method in physical examination where the hands are used to feel body parts to detect abnormalities.

Percussion

A diagnostic technique used by healthcare providers involving tapping on the body's surface to evaluate the size, consistency, and borders of internal organs.

Auscultation

The act of listening to the internal sounds of the body, typically using a stethoscope, as a diagnostic method, especially in the examination of the heart and lungs.