The data below are selected accounts from the adjusted trial balance of Dan’s Sports Equipment, Inc., on September 30, 20x6, the fiscal year end.

The company’s beginning merchandise inventory was $81,222 and ending merchandise inventory is $76,664 for the period.

Required 1. Prepare a multistep income statement for Dan’s Sports Equipment, Inc.
Store Salaries Expense; Advertising Expense; Store Supplies Expense; and Depreciation Expense–Store Equipment are selling expenses. The other expenses are general and administrative expenses. The company uses the periodic inventory system. Show details of net sales and operating expenses.
2. User Insight: Based on your knowledge at this point in the course, how would you use the income statement for Dan’s Sports Equipment to evaluate the company’s profitability? What other financial statements should you consider and why?
Merchandising Transactions: Periodic Inventory System

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Dan's Sports Equipment, Inc. Partial Adjusted Trial Balance September 30, 20x6 Sales $433,912 Sales Returns and Allowances $ 11,250 Purchases 221,185 Purchases Returns and Allowances 30,238 Freight-In 10,078 Store Salaries Expense 107,550 Office Salaries Expense 26,500 Advertising Expense Rent Expense Insurance Expense 18,200 14,400 2,800 Utilities Expense 18,760 Store Supplies Expense 464 Office Supplies Expense 814 Depreciation Expense, Store Equipment 1,800 Depreciation Expense, Office Equipment 1,850 Income Taxes 5,000