opportunity is the sale of fine European mixers. The owner of Kzinski Supply Co$.$ has approached Natalie to become the exclusive

distributor of these fine mixers in her state. The current cost of a mixer is approximately $$575,$ and Natalie would sell each one for

$$1,150.$ Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily

identified.

Natalie asks you the following questions.

"Would you consider these mixers to be inventory or should they be classified as supplies or equipment?"

"I've learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for

inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to

sell?"

"How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?"

The trial balance for cookie creations as on December $31,2018$ is as follows:

Prepare a multiple$-$step income statement for the month ended January $31,2019.($Enter negative amounts using either a negative

sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)$

COOKIE CREATIONS INC.

Income Statement

January $31,2019$

$

In the end, Natalie decides to use the perpetual inventory system. The following transactions happen during the month of January.

Jan. $4$ Bought five deluxe mixers on account from Kzinski Supply Co$.$ for $$2,875,$ FOB shipping point, terms $\frac{n}{30}.$

$6$ Paid $$100$ freight on the January $4$ purchase.

$7$ Returned one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for

the cost of mixer plus $$20$ for the cost of freight that was paid on January $6$ for one mixer.

$8$ Collected $$375$ of the accounts receivable from December $2018.$

$12$ Three deluxe mixers are sold on account for $$3,450,$ FOB destination, terms $\frac{n}{30}.($Cost of goods sold is $$595$ per mixer.$)$

$14$ Paid the $$75$ of delivery charges for the three mixers that were sold on January $12.$

$14$ Bought four deluxe mixers on account from Kzinski Supply Co$.$ for $$2,300,$ FOB shipping point, terms n$/30.$

$17$ Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an

additional $$1,000$ cash in Cookie Creations in exchange for common stock.

$18$ Paid $$80$ freight on the January $14$ purchase.

$20$ Sold two deluxe mixers for $$2,300$ cash. $($Cost of goods sold is $$595$ per mixer.$)$

$28$ Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked

$20$ hours in January and is also paid the $$56$ owed at December $31,2018.($Natalie$\text{'}$s assistant earns $$8$ an hour.$)$

$28$ Collected the amounts due from customers for the January $12$ transaction.

$30$ Paid a $$145$ utility bill $($ $$75$ for the December $2018$ accounts payable and $$70$ for the month of January$).$

$31$ Paid Kzinski all amounts due.

$31$ Cash dividends of $$750$ are paid. $($do the income statement I dont understand how to do it$.)$