Prepare a retailer’s income statement (Learning Objective 5)

Robbie Roberts is the sole proprietor of Precious Pets, an e-tail business specializing in the sale of high-end pet gifts and accessories. Precious Pets’ sales totaled $987,000 during 2007. During the year, the company spent $56,000 on expenses relating to Web site maintenance; $22,000 on marketing; and $25,000 on wrapping, boxing, and shipping the goods to customers. Precious Pets also spent $642,000 on inventory pur¬ chases and an additional $21,000 on freight-in charges. The company started the year with $17,000 of inventory on hand and ended the year with $15,000 of inventory. Prepare Precious Pets’ 2007 income statement.