Best Company sells office supplies. The following information summarizes Best\'s

Question

Best Company sells office supplies. The following information summarizes Best's operating activities for 2012: Utilities for store $6,000 Rent for store $8,000 Sales commissions $4,500 Purchases of merchandise $54,000 Inventory on January 1, 2012 $30,000 Inventory on December 31.2012 $20,500 Sales revenue $108,000 Required: Prepare an income statement for Best Company, a merchandiser, for the year ended December 31. 2012. using the format below. Please include a vertical analysis rounded to the nearest tenth of a percent. 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 General expenses Rent expense Utilities expense Total operating expenses Net income/(loss)

Explanation / Answer

sales revenue 108000 cost of goods sold Beginning inventory 30000 Purchase 54000 Cost of goods available for sale 84000 Ending iventory -20500 Cost of goods sold 63500 Gross profit 44500 Selling expense sales commission 4500 General expense Rent expense 8000 Utilities expense 6000 Total operating expense 18500 Net income /(loss) 26000

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