Cannon Company Operates a Clothing Store That Reported the Following

question 84

Essay

Cannon Company operates a clothing store that reported the following operating results for the current year: $$\begin{array} { | l | c | } \hline \quad \quad \quad \quad \quad \quad \quad \quad \quad \quad { \text { Income Statement } } \\\hline \text { Sales revenue } & \$ 2,000,000 \\\hline \text { Cost of goods sold } & ( 1,200,000 ) \\\hline \text { Gross margin } & \$ 800,000 \\\hline \text { Employee commissions and bonuses ( } \$ \% \text { of sales } ) & ( 100,000 ) \\\hline \text { Depreciation expense } & ( 150,000 ) \\\hline \text { Salaries expense } & ( 260,000 ) \\\hline \text { Shipping and delivery expense ( } 2 \% \text { of sales) } & ( 40,000 ) \\\hline \text { Advertising expense } & ( 80,000 ) \\\hline \text { Net income } & \$ 170,000 \\\hline\end{array}$$ Required: Prepare an income statement for Cannon Company using the contribution margin format.

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Definitions:

Motor Tension

Physical manifestations of stress or anxiety, evident in muscle tightness or involuntary movements.

Hyperactivity

Characterized by an excess of movement and/or quick actions that are not fitting to the setting or context, often associated with ADHD.

Apprehensive Expectations

Feelings of anxiety or fear about future events or outcomes, often anticipating negative or unfavorable results.

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about a variety of topics, often interfering with daily activities.