Prepare an income statement for Rachel Mini Supermarket based on the given data and answer the questions that follow.

For the month of June, Rachel Mini Supermarket had a total assets of 986,380.00

Sales returns and allowances of the same month were 16,517.25

On June 1, Rachel Mini Supermarket had an inventory of merchandise costing 123,405.00. During the second week of the month, merchandise costing 126,308.00 was purchased.

On June 30, merchandise inventory was 93,008.00

Operating expenses for the month were as follows: salary and wages 48,700.00; space rent 25,000.00; utilities 3,000.00; depreciation of equipment 6,400.00; advertisement 5,210.00; and other expenses 26,775.00 a. What were Rachel Mini Supermarkets net sales for the month?

b. What was the cost of goods sold for June?

c. What was Rachel Mini Supermarkets gross profit on its sales?

d. What were Rachel Mini Supermarkets total operating expenses?

e. What was the net income or loss?

RACHEL MINI SUPERMARKET

INCOME STATEMENT

FOR THE MONTH OF JUNE

Revenue

Sales 986,380.00

Less: Sales Returns and Allowances 16,517.25

Net Sales 969,862.75a Less: Cost of Goods Sold

Beginning Inventory 123,405.00

Add: Purchases 126,308.00

Goods Available for Sale 249,713.00

Less: Ending Inventory 93,008.00

Cost of Goods Sold 156,705.00b Gross Profit on Sales 813,157.75c Less: Operating Expenses

Salaries and Wages 48,700.00

Rent 25,000.00

Utilities 3,000.00

Depreciation of Store Equipment 6,400.00

Advertisement 5,210.00

Other expenses 26,775.00

Total Operating Expenses 115,085.00d NET INCOME or LOSS 698,072.75e

a. Net Sales = Sales Sales Returns and Allowances

= 986,380.00 16,517.25 = 969,862.75a

b. Cost of Goods Sold = Beginning Inventory + Purchases Ending Inventory = 123,405.00 + 126,308.00 = 156,705.00b

c. Gross Profit = Net Sales Cost of Goods Sold

Statement Heading Revenue Section