Question

Fabulous Finds sold $17,790 of merchandise in 20Y5, with the cost of the merchandise totaling $2,250. Fabulous Finds had the following expenses: sales salaries, $2,100; office salaries, $3,000; advertising expense, $1,200; office supplies, $700; office utilities, $1,400; depreciation on store equipment, $1,070; depreciation on office equipment, $1,800; delivery expense, $950; and insurance expense, $1,200. The company also had interest revenue of $2,200 and investment expense of $900. Prepare the company’s income statement for the fiscal year ended March 31.

Answer 1

SOLUTION:

Income Statement - Fabulous Finds
Sales			17,790
Cost of goods sold			2,250
Gross profit			15,540
Operating expenses:
Selling expenses:
Sales salaries expense	2,100
Advertising expense	1,200
Depreciation—store equipment	1,070
Delivery expense	950
Total selling expenses		5,320
Administrative expenses
Office salaries expense	3,000
Depreciation—office equipment	1,800
Office utilities expense	1,400
Insurance expense	1,200
Office supplies expense	700
Total administrative expenses		8,100
Total operating expenses			13,420
Income from operations			2,120
Other revenue and expense:
Interest revenue	2,200
Investment expense	-900		-1,300
Net income			3,420