Excellent Company Sells Accounting Textbooks -
Required: Prepare an Income Statement for the Year Ended

question 69

Essay

Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2012:
$$\begin{array} {| l | r |} \hline\text { Nerchendise inventory, Janury } 1,2012 & \$ 10,000 \\\hline \text { Nerchendise inventory, Decenber } 31,2012 & \$ 7,000 \\\hline \text { Purcheses } & \$ 95,000 \\\hline \text { Selling and Adrminitrative Expenses } & \$ 65,000 \\\hline \text { Sales Reverue } & \$ 180,000 \\\hline\end{array}$$
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Required: Prepare an income statement for the year ended December 31, 2012. Please use the format provided below, and include a vertical analysis showing percentages rounded to the nearest tenth of a percent.
$$\begin{array} { | l | l | l | l | } \hline \text { Sales revenue } &\quad\quad &\quad\quad &\quad\quad \\\hline \text { Cost of goods sold } & & & \\\hline \text { Beginning inventory } & & & \\\hline \text { Purchases } & & & \\\hline \text { Cost of goods available for sale } & & & \\\hline \text { Ending inventory } & & & \\\hline \text { Cost of goods sold } & & & \\\hline \text { Gross profit } & & & \\\hline \text { Selling and administrative expenses } & & & \\\hline \text { Net income/(loss) } & & & \\\hline\end{array}$$

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Definitions:

Government Spending

Financial expenditures by the government to influence a nation's economy, including investments in public services and infrastructure.

Taxation

The process by which a government collects money from individuals and businesses to fund public services and infrastructure.

Stabilizing

Actions or strategies aimed at maintaining or recovering economic balance and reducing volatility in financial markets or economies.

Consumption

The use of goods and services by households or individuals, usually the largest component of GDP.