Chapter 6 Merchandising Activities Problem 6.2A Hendry's Boutique is a retail clothing store for women. The store operates out of a rented building in Taipei. Shown below is the store's adjusted year-end trial balance dated 31 December 2013 (dollar amounts are stated in thousands). Prepara of a Mer Income L01, LO2 exce HENDRY'S BOUTIQUE Adjusted Trial Balance 31 December 2013 $ 15,200 2.600 17,500 1,800 900 41,000 $ 12,000 12,750 3,200 18,000 21,050 226,000 Cash Accounts receivable Inventory Prepaid rent Office supplies Office equipment Accumulated depreciation: office equipment Accounts payable Sales taxes payable Ordinary shares Retained earnings Sales Sales returns and allowances Cost of goods sold Purchase discounts lost Utilities expense Office supply expense Depreciation expense: office equipment Rent expense Insurance expense Salaries expense Income taxes expense 2,500 100,575 250 4,120 520 2,750 6,100 900 88,095 8,190 $293,000 $293,000 Instructions c. a. Prepare an income statement for Hendry's Boutique dated 31 December 2013. b. Compute the store's gross profit margin as a percentage of net sales. Do the store's customers seem to be satisfied with their purchases? Defend your answer. d. Explain how you can tell that the business records inventory purchases net of any purchase The store reports sales taxes payable of $3,200,000 in its adjusted trial balance. Explain why it does not report any sales taxes expense. f. Which accounts appearing in the store's adjusted trial balance comprise its operating cycle? discounts. e. Carlets