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In: Accounting

You’re the managerial accountant for Club Kravitz.  Annual sales are $100,000 in 2019.  Wages are 40%, annual salaries...

You’re the managerial accountant for Club Kravitz.  Annual sales are $100,000 in 2019.  Wages are 40%, annual salaries are $5000, rent is $1000 per month, CGS is $30,000 for the year, and marketing expenses are 10% of total sales.  Prepare an income statement using the gross margin format for 2019.

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Expert Solution

Club Kravitz
Income Statement
Sales $      100,000.00
Cost of Goods Sold $              30,000.00
Wages (40% of 100000) $              40,000.00 $        70,000.00
Gross Margin $        30,000.00
Operating Expenses
Salaries $                5,000.00
Rent (1000*12) $              12,000.00
Marketing Expenses (10% of 100000) $              10,000.00
Operating Expenses $        27,000.00
Net Income $           3,000.00

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