Merchandising Income statement: perpetual Inventory system

p8. Selected accounts from Keystone Furniture’s adjusted trial balance as of August 31, 2014, the end of the fiscal year, follow.

Keystone Furniture partial Adjusted trial Balance

August 31, 2014

 

 

Sales	Â	867,824
Sales Returns and Allowances	22,500	Â
Cost of Goods Sold	442,370	Â
Freight-In	20,156	Â
Store Salaries Expense	215,100	Â
Office Salaries Expense	53,000	Â
Advertising Expense	36,400	Â
Rent Expense	28,800	Â
Insurance Expense	5,600	Â
Utilities Expense	17,520	Â
Store Supplies Expense	4,928	Â
Office Supplies Expense	3,628	Â
Depreciation Expense—Store Equipment	3,600	Â
Depreciation Expense—Office Equipment	3,700	Â

reQUIreD

1.    Prepare a multistep income statement for Keystone. Store Salaries Expense, Advertis- ing Expense, Store Supplies Expense, and Depreciation Expense—Store Equipment are selling expenses. The other expenses are general and administrative expenses. The company uses the perpetual inventory system. Show details of net sales and operating expenses.

 

 

 

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2.    Business AppliCAtion ▶ Based on your knowledge at this point in the course, how would you use the income statement for Keystone to evaluate the company’s profitability? What other financial statement should be considered, and why?