At the end of the fiscal year, August 31, 2010, selected accounts from the adjusted trial balance for Pasha’s Delivery, Inc., appeared as follows: 

Required 

1. Using the information given, prepare an income statement for Pasha’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. 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 Pasha’s Delivery, Inc. to evaluate the company’s profitability? What other financial statement should be considered and why?

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Pasha's Delivery, Inc. Partial Adjusted Trial Balance August 31, 2010 Sales $169,000 $ 9,000 Sales Returns and Allowances Cost of Goods Sold 61,400 Freight-In Store Salaries Expense Office Salaries Expense Advertising Expense 2,300 32,825 12,875 24,100 Rent Expense Insurance Expense Utilities Expense 2,400 1,200 1,560 Store Supplies Expense Office Supplies Expense 2,680 1,175 Depreciation Expense-Store Equipment 1,250 Depreciation Expense-Office Equipment 800 Income Taxes 2,000