Merchandising business income statement and analysis The Quick Department Store is a family-owned merchandising firm that uses a calendar-year accounting period. The company uses a periodic inventory system, and the year-end inventory count reveals an ending balance of $233,000. Other year-end account balances are shown in the year-end trial balance. The company is subject to a 35 percent income tax rate. Sixty percent of salary expense is for sales personnel. The company's trial balance is presented below.

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QUICK DEPARTMENT STORE Trial Balance December 31 Debits Credits Cash $ 38,000 Accounts receivable 129,000 Merchandise inventory, 1/1 330,000 Building...... 1,275,000 Accumulated depreciation, building $ 315,000 Equipment...... 138,000 Accumulated depreciation, equipment 55,500 Investments .... 75,000 Accounts payable 67,500 Notes payable. Mortgage payable Capital stock ... 90,000 600,000 405,000 Retained earnings. 256,500 Sales.... 1,410,000 Sales returns and allowances 18,000 Purchases..... 718,500 Purchase returns and allowances.. 21,000 Dividends 25,000 Freight-in 12,750 Advertising 96,900 Commissions on sales 70,500 Depreciation, building. 46,800 Depreciation, equipment. 17,250 Equipment rent 4,800 Salaries.. 144,000 Utilities 81,000 Totals $3,220,500 $3,220,500