Question

eaching m ances Educational Shopping Travel ESPN Fantasy J obs N Netflix V VUDU Resources Basketball in Linked Book Video Calculator Print Item Service Organization Income Statement Instructions Labels and Amount Descriptions Income Statement Concluding Question Instructions Labels and Amount Descriptions Concluding Question Refer to the list below for the exact wording of a label or an amount description within your income statement 2. Complete the statements below that briefly explain why Allstar's income statement has no line item for Cost of Goods Sold Allstar Exposure designs and sells advertising services to small, relatively unknown companies Last month Allstar had sales commissions costs of $50,000, technology costs of 375.000, and research and development costs of $200.000. Selling expenses were $10,000 and administrative expenses equaled $35.000 Sales totaled $410.000 Labels • Allstar has no cost of goods sold line item because the company is a Add operating expenses rather than a For the Past Month Less operating expenses As such, Alistar has no Amount Descriptions Required: . Instead costs appear on the income statement Administrative expenses Operating income Prepare an income statement for Allstar for the past month 2. Brefly explain why Allstar's income statement has no line item for Cost of Goods Sold Operating loss Research and development Sales commissions Sales revenue Selling expenses Technology Previous Check My Work All work saved. Save and Exit Submit Assign in HE SO

Answer 1

1)

Allstar Exposure
Income Statement
For the Past Month
1.	Sales revenue		$410000
2.	Less: Operating expenses
3.	Sales commissions	50000
4.	Technology	75000
5.	Research and development	200000
6.	Selling expenses	10000
7.	Administrative expenses	35000	-370000
8.	Operating income		$40000

2) Allstar has no cost of goods sold line item because the company is a service provider rather than a manufacturer.

As such, Allstar has no inventory costs.

Instead all costs appear on the income statement as operating expenses.