At the end of the fiscal year, August 31, 2011, selected accounts from the adjusted trial balance for Leonid’s Delivery, Inc., appeared as follows:

REQUIRED

1. Using the information given, prepare an income statement for Leonid’s Delivery, Inc. Store Salaries Expense, Advertising Expense, Stores Supplies Expense, and Depreciation Expense—Store Equipment are selling expenses. The other expenses are general and administrative expenses. Freight-in should be combined with Cost of Goods Sold. The company uses the perpetual inventory system. Show details of net sales and operating expenses.

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

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Leonid's Delivery, Ind. Partial Adjusted Trial Balance August 31, 2011 Sales Sales Returns and Allowances Cost of Goods Sold Store Salaries Expense Office Salaries Expense Advertising Expense Rent Expense Insurance Expense Utilities Expense Store Supplies Expense Office Supplies Expense Depreciation Expense Store Equipment Depreciation Expense Office Equipment $338,000 S 18,000 127,400 65,650 25,750 48,200 4,800 2,400 引20 5,360 2,350 2,500 1,600 4,000 ncome Taxes