In 2012 Craig Gonzales opened Craig’s Pets, a small retail shop selling pet supplies. On December 31, 2012, Craig’s accounting records showed the following:

Inventory on December 31,2012………………..$10,100

Inventory on January 1, 2012………………….…15,400

Sales revenue…………………………………..….58,000

Utilities for shop…………………………………......3,300

Rent for shop…………………………………....…..4,500

Sales commissions…………………………..……..2,850

Purchases of merchandise……………………....26,000

Requirement

1. Prepare an income statement for Craig’s Pets, a merchandiser, for the year ended December 31, 2012.

2. What are the main differences between the income statement for a merchandising company and the income statement for a services company?