Question

University Electronics has provided the following information for last year:

Sales revenue	$	4,030,000
Store rent		223,000
Store utilities		132,000
Administrative costs		293,000
Sales commissions		644,000
Merchandise purchases		2,780,000
Transportation-in costs		106,500
Merchandise inventory, March 1		188,000
Merchandise inventory, February 28		213,000

Prepare an income statement for last year with a supporting cost of goods sold statement.

Answer 1

UNIVERSITY ELECTRONICS
Income Statement
For the Year Ended February 28
Sales revenue	4030000
Cost of goods sold	2861500
Gross margin	1168500
Marketing and administrative costs	1292000		=223000+132000+293000+644000
Operating loss	(123500)
UNIVERSITY ELECTRONICS
Cost of Goods Sold Statement
For the Year Ended February 28
Merchandise inventory, March 1		188000
Merchandise purchases	2780000
Transportation-­in	106500
Total cost of goods purchased		2886500
Cost of goods available for sale		3074500
Merchandise inventory, February 28		213000
Cost of goods sold		2861500