Best, Inc, a merchandiser, sells office supplies

Question

The following information summarizes Best's operating activities during the year:

Utilities Expense $6,000
Rent for Store Expense 8,000
Sales Commissions Expense 4,500
Purchases of Merchandise 54,000
Merchandise Inventory on January 1 30,000
Merchandise Inventory on December 31 20,500
Sales Revenue 108,000

Required: Prepare an income statement for Best, Inc for the year ended December 31, using the format below.

Sales Revenue
Cost of Goods Sold:
Beginning Inventory
Purchases
Cost of Goods Available for Sale
Ending Inventory
Cost of Goods Sold
Gross Profit
Selling Expenses:
Sales Commissions Expense
Administrative Expenses:
Rent Expense
Utilities Expense
Total Operating Expenses
Operating Income

What will be an ideal response

Answer 1

Best, Inc.
Income Statement
Year Ended December 31, 20XX
Sales Revenue $108,000
Cost of Goods Sold:
Beginning Inventory $30,000
Purchases 54,000
Cost of Goods Available for Sale 84,000
Ending Inventory (20,500 )
Cost of Goods Sold 63,500
Gross Profit 44,500
Selling Expenses:
Sales Commissions Expense 4,500
Administrative Expenses:
Rent Expense 8,000
Utilities Expense 6,000
Total Operating Expenses 18,500
Operating Income $26,000