Question

On January 1, 2013, Lindsay Owens opened Picture Perfect, a small retail store that sells picture frames, crafts & art. On June 30, 2014, her accounting records show the following: Store rent $7.000 Sales revenue $90.000 Sales salaries 4,500 Store utilities 1,950 Freight in 600 Purchase of merchandise 36,000 Inventory on June 30, 2014 9.600 Inventory on January 1, 2014 12,000 Advertising expense 2,300 Prepare an income statement for Picture Perfect, a merchandiser, for the period ended June 30, 2014

Answer 1

Picture Perfect Income Statement For the year ended June 30, 2014 Particulars Sales revenue 90,000 (39,000) Less: Cost of Goods Sold (Note 1) Gross Profit (A) 51,000 Operating expenses: Store utilities 1,950 7,000 4,500 2,300 Store rent Sales salaries Advertisement expense Operating expense (B) Net Income (C) = (A) - (B) (15,750) 35,250 Note 1 Cost of Goods Sold Inventory on January 1, 2014 Add: Purchase Add: Freight in Less: Inventory on June 30, 2014 12,000 36,000 600 (9,600) 39,000 Cost of Goods Sold