Hendrys Boutique is a retail clothing store for women. The store operates out of a rented building in Storm Lake, Iowa. The following is the stores adjusted year-end trial balance dated December 31, current year.

HENDRY'S BOUTIQUE
Adjusted Trial Balance
December 31, current year
Cash	$	20,640
Accounts receivable		3,760
Merchandise inventory		29,000
Prepaid rent		2,960
Office supplies		2,040
Office equipment		54,000
Accumulated depreciation: office equipment					$	16,000
Accounts payable						16,900
Sales taxes payable						4,160
Capital stock						24,800
Retained earnings						38,680
Sales						306,400
Sales returns and allowances		2,900
Cost of goods sold		145,680
Purchase discounts lost		1,100
Utilities expense		6,896
Office supply expense		1,136
Depreciation expense: office equipment		4,900
Rent expense		8,280
Insurance expense		1,450
Salaries expense		110,418
Income taxes expense		11,780
	$	406,940			$	406,940

Required:

a. Prepare an income statement for Hendrys Boutique dated December 31, current year.

b. Compute the stores gross profit margin as a percentage of net sales.

c. Do the stores customers seem to be satisfied with their purchases?

multiple choice

Yes

No

f. Which accounts appearing in the stores adjusted trial balance comprise its operating cycle? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

Cash

Accounts receivable

Merchandise inventory

Prepaid rent

Office supplies