P16-30B Preparing an income statement for a merchandising company [45–55 min]
In 2012 Craig Gonzales opened Craig’s Pets, a small retail shop selling pet supplies.
On December 31, 2012, Craig’s accounting records showed the following:
|
Inventory on December 31, 2012 |
$ 10,100 |
|
Inventory on January 1, 2012 |
15,400 |
|
Sales revenue |
58,000 |
|
Utilities for shop |
3,300 |
|
Rent for shop |
4,500 |
|
Sales commissions |
2,850 |
|
Purchases of merchandise |
26,000 |
Requirement
1. Prepare an income statement for Craig’s Pets, a merchandiser, for the year ended December 31, 2012.
2. What are the main differences between the income statement for a merchandising company and the income statement for a services company?