Prepare income statements (Learning Objective 5)} Part One: In 2007, Hannah Summit opened Hannah's Pets, a small
Question:
Prepare income statements (Learning Objective 5)}
Part One: In 2007, Hannah Summit opened Hannah's Pets, a small retail shop selling pet supplies. On December 31, 2007, her accounting records show the following:
\section*{Requirement}
Prepare an income statement for Hannah's Pets, a merchandiser, for the year ended December 31, 2007.
Part Two: Hannah's Pets succeeded so well that Hannah decided to manufacture her own brand of pet toys-Best Friends Manufacturing. At the end of December 2008, her accounting records show the following:
\section*{Requirements}
1. Prepare a schedule of cost of goods manufactured for Best Friends Manufacturing for the year ended December 31, 2008.
2. Prepare an income statement for Best Friends Manufacturing for the year ended December 31, 2008.
3. How does the format of the income statement for Best Friends Manufacturing differ from the income statement of Hannah's Pets?
Part Three: Show the ending inventories that would appear on these balance sheets:
1. Hannah's Pets at December 31, 2007 2. Best Friends Manufacturing at December 31, 2008
Step by Step Answer:
