Gross sales 346,400 Les: sales returns and allowances 1,000 A. Total Business Income Cost of Goods Sold: Beginning Inventory, July 2012 160,000 Add: Direct material 90,000 Direct labour 50,000 Factory overhead 2,000 Less Closing inventory, June 2013 100,000 B. Cost of Goods Sold C. Gross Profit (A-B) Expenses Salaries 68,250 Utility bills 5,800 Rent 23,000 Office supplies 2,250 Insurance 3,900 Advertising 8,650 Telephone 2,700 Travel and entertainment 2,550 Dues and subscriptions 1,100 Interest paid 2,140 Commission paid 1,250 Owner's drawings 11,700 D. Total expenses Net Profit (C-D)