Simons,Inc Prepare an Income Statement for Simons,Inc

question 91

Essay

Simons,Inc.sells plasticware.The following information summarizes Simons' operating activities for the year:
$$\begin{array} { |l | r | } \hline \text { Utilities Expense } & \$ 65,000 \\\hline \text { Rent Expense } & 10,000 \\\hline \text { Sales Commissions Expense } & 32,500 \\\hline \text { Purchases of Merchandise } & 260,000 \\\hline \text { Merchandise Inventory on January 1 } & 65,000 \\\hline \text { Merchandise Inventory on December 31 } & 97,500 \\\hline \text { Sales Revenue } & 650,000 \\\hline\end{array}$$ Prepare an income statement for Simons,Inc. ,a merchandiser,for the year ended December 31 using the format below:
$$\begin{array} { | l | l | l | } \hline \text { Sales Revenue } & \quad\quad\quad& \quad\quad\quad\\\hline \text { Cost of Goods Sold: } & & \\\hline \text { Beginning Inventory } & & \\\hline \text { Purchases } & & \\\hline \text { Cost of Goods Available for Sale } & & \\\hline \text { Ending Inventory } & & \\\hline \text { Cost of Goods Sold } & & \\\hline \text { Gross Profit } & & \\\hline \text { Selling Expenses: } & & \\\hline \text { Sales Commissions Expense } & & \\\hline \text { Administrative Expenses: } & & \\\hline \text { Rent Expense } & & \\\hline \text { Utilities Expense } & & \\\hline \text { Total Operating Expenses } & & \\\hline \text { Operating Income } & & \\\hline\end{array}$$

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Definitions:

Government Purchases

Spending by the government on goods and services that are included in the calculation of the country's gross domestic product.

Demand Curve

An illustration that depicts the inverse relationship between the price of an item and the quantity demanded by consumers within a certain period.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the real yield to lenders or investors.

Investment

The process of spending money to purchase assets with the expectation of generating future profits or income.