Question

University Electronics has provided the following information for last year.

Sales revenue	$	4,060,000
Store rent		226,000
Store utilities		129,000
Administrative costs		296,000
Sales commissions		638,000
Merchandise purchases		2,810,000
Transportation-in costs		108,000
Merchandise inventory, March 1		191,000
Merchandise inventory, February 28		216,000

Required:

1. Prepare a cost of goods sold statement for last year.

2. Prepare an income statement for last year.

Answer 1

S 191,000 UNIVERSITY ELECTRONICS Cost of Goods Sold Statement For the Year Ended February 28 Merchandise inventory, March 1 Merchandise purchases $ 2.810,000 Transportation-in costs S 108.000 Total cost of goods purchased Cost of goods available for sale Merchandise inventory, February 28 Cost of goods sold $2.918.000 $3,109,000 $ 216,000 $2.893,000 UNIVERSITY ELECTRONICS Income Statement For the Year Ended February 28 Sales revenue Cost of goods sold Gross margin Marketing and administrative costs Operating loss $4.060,000 $2.893,000 $1,167,000 $1,289,000 $ 122,000 Marketing and administrative Costs = $226,000+$129,000+$296,000+$638,000 = $1,289,000