Salon Secrets is a retail chain specializing in salon-quality hair-care products. During the year, Lady Barber had sales of $ 39,225,000. The company began the year with $ 2,985,000 of merchandise inventory and ended the year with $ 3, 785,000 of inventory. During the year, Lady Barber purchased $ 24,100, 000 of merchandise inventory. The company's selling, general, and administrative expenses totaled $ 7,00,000 for the year. Prepare Lady Barber's income statement for the year.

Question

Business

Shawn Phelps

15 April, 17:53

Salon Secrets is a retail chain specializing in salon-quality hair-care products. During the year, Lady Barber had sales of $ 39,225,000. The company began the year with $ 2,985,000 of merchandise inventory and ended the year with $ 3, 785,000 of inventory. During the year, Lady Barber purchased $ 24,100, 000 of merchandise inventory. The company's selling, general, and administrative expenses totaled $ 7,00,000 for the year. Prepare Lady Barber's income statement for the year.

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Chace Howard · Answer 1

Operating income = $

Explanation:

Calculation of Cost of goods sold:

= Purchase during the year + opening Inventory - closing inventory

= $24,100,000 + $2,985,000 - $3,785,000

= $23,300,000

Income statement

Particular Amount

Sales revenue $39,225,000

LESS: Cost of goods sold $23,300,000

Gross margin $15,925,000

LESS: Expenses $700,000

Operating income $15,225,000