Hendricks Lumber, a sole proprietorship, has two sales depart¬

ments: lumber and hardware. Hendricks’s accountant prepared the adjusted trial balance shown at the end of the fiscal year, after all adjustments, including adjust¬
ments for merchandise inventory, had been recorded and posted.
Instructions Prepare an income statement to show gross profit for each department and income from operations and net income for the entire business. Beginning bal¬
ances of merchandise inventory are: lumber, $235,848; hardware, $217,446.