Best,Inc,A Merchandiser,sells Office Supplies Required: Prepare an Income Statement for Best,Inc

question 76

Essay

Best,Inc.,a merchandiser,sells office supplies.The following information summarizes Best's operating activities during the year:
$$\begin{array} { | l| r | } \hline \text { Utilities Expense } & \$ 6,000 \\\hline \text { Rent for Store Expense } & 8,000 \\\hline \text { Sales Commissions Expense } & 4,500 \\\hline \text { Purchases of Merchandise } & 54,000 \\\hline \text { Merchandise Inventory on January 1 } & 30,000 \\\hline \text { Merchandise Inventory on December 31 } & 20,500 \\\hline \text { Sales Revenue } & 108,000 \\\hline\end{array}$$
Required: Prepare an income statement for Best,Inc.for the year ended December 31,using the format below.
$$\begin{array} { | l | l | l | } \hline \text { Sales Revenue } &\quad\quad &\quad\quad \\\hline \text { Cost of Goods Sold: } & & \\\hline \text { Beginning Inventory } & & \\\hline \text { Purchases } & & \\\hline \text { Cost of Goods Available for Sale } & & \\\hline \text { Ending Inventory } & & \\\hline \text { Cost of Goods Sold } & & \\\hline \text { Gross Profit } & & \\\hline \text { Selling Expenses: } & & \\\hline \text { Sales Commissions Expense } & & \\\hline \text { Administrative Expenses: } & & \\\hline \text { Rent Expense } & & \\\hline \text { Utilities Expense } & & \\\hline \text { Total Operating Expenses } & & \\\hline \text { Operating Income } & & \\\hline\end{array}$$

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Definitions:

Antilapse Clause

A provision in a will or estate plan that specifies what happens to a gift if the beneficiary predeceases the donor, often allowing the gift to pass to the beneficiary's heirs.

Incontestability Clause

A part of an insurance contract that precludes an insurance company from challenging statements in an insurance application after a certain period of time.

State Mandated

Requirements or actions imposed by state governments that must be complied with by individuals or entities within that state.

Premium

An insurance payment.