Some people like to play a game that constructs a sequence of chemical elements where each element in the sequence begins with the last letter of its predecessor. For example,….
What other financial statements should you consider and why?
Merchandising Income Statement: Periodic Inventory System
Selected accounts from the adjusted trial balance for Pierre’s Gourmet Shop, Inc., as of March 31, 20×7, the end of the fiscal year, are shown below.
The merchandise inventory for Pierre’s Gourmet Shop was $38,200 at the beginning of the year and $29,400 at the end of the year.
1. Using the information given, prepare an income statement for Pierre’s Gourmet Shop, Inc. Store Salaries Expense; Advertising Expense; Store Supplies Expense; and Depreciation Expense–Store Equipment are selling expenses. The other expenses are general and administrative expenses. The company uses the periodic inventory system. Show details of net sales and operating expenses.
2. User Insight: Based on your knowledge at this point in the course, how would you use the income statement for Pierre’s Gourmet Shop to evaluate the company’s profitability? What other financial statements should you consider and why?