Answer:
Given that,
Administrative costs = $72,000
Merchandise inventory, July 1 = 28,000
Merchandise inventory, July 31 = 25,000
Merchandise purchases = 630,000
Sales commissions = 43,500
Sales revenue = 944,000
Store rent = 13,900
Store utilities = 3,100
Transportation-in costs = 5,300
1. Cost of goods sold statement:
For the Month Ended July 31,
Total cost of goods purchased = Merchandise purchases + Transportation-in
= 630,000 + 5,300
= $635,300
Cost of goods available for sale = Merchandise inventory, July 1 + Total cost of goods purchased
= 28,000 + $635,300
= $663,300
Cost of goods sold = Cost of goods available for sale - Merchandise inventory, July 31
= $663,300 - $25,000
= $638,300
2. Income statement:
For the Month Ended July 31,
Gross margin = Sales revenue - Cost of goods sold
= 944,000 - $638,300
= $305,700
Marketing and administrative costs = Administrative costs + Sales commissions + Store rent + Store utilities
= $72,000 + $43,500 + $13,900 + $3,100
= $132,500
Operating profit = Gross margin - Marketing and administrative costs
= $305,700 - $132,500
= $173,200
