Allstar Exposure designs and sells advertising services to small, relatively unknown companies. Last month, Allstar had sales commissions costs of $45,000, technology costs of $76,000, and research and development costs of $200,000. Selling expenses were $9,000, and administrative expenses equaled $31,000. Sales totaled $460,000.

	Required:
1.	Prepare an income statement for Allstar for the past month.
2.	Briefly explain why Allstars income statement has no line item for Cost of Goods Sold.

Labels
Add operating expenses
For the Next Month
For the Past Month
Less operating expenses
Amount Descriptions
Administrative expenses
Operating income
Operating loss
Research and development
Sales commissions
Sales revenue
Selling expenses
Technology
Total selling expenses

2. Complete the statements below that briefly explain why Allstars income statement has no line item for Cost of Goods Sold.

Allstar has no cost of goods sold line item because the company is a __________ , rather than a __________

As such, Allstar has no _____

Instead, ____ costs appear on the income statement as _____