Problem 6.2A (Algo) Preparation and Interpretation of a Merchandising Company's Income Statement (LO6-4, LO6-5, LO6-6) Hendry's Boutique is a retail clothing store for women. The store operates out of a rented building in Storm Lake, lowa. The following is the store's adjusted year-end trial balance dated December 31 , current year: HENDRY'S BOUTIQUE Adjusted Trial Balance December 31 , Current Year Cash $19,290 Accounts receivable 3,400 Merchandise inventory 24,500 Prepaid rent 2,510 office supplies 1,500 office equipment 51,300 Accumulated depreciation: office equipment $15,100 Accounts payable 16,000 Sales taxes payable 3,980 Capital stock 23,000 Retained earnings 27,200 Sales 286,600 Sales returns and allowances 3,000 Cost of goods sold 127,620 Purchase

Problem 6.2A (Algo) Preparation and Interpretation of a Merchandising Company's Income Statement (LO6-4, LO6-5, LO6-6) Hendry's Boutique is a retail clothing store for women. The store operates out of a rented building in Storm Lake, lowa. The following is the store's adjusted year-end trial balance dated December 31, current year: Required: a. Prepare an income statement for Hendry's Boutique dated December 31, current year. b. Compute the store's gross profit margin as a percentage of net sales. c. Do the store's customers seem to be satisfied with their purchases? f. Which accounts appearing in the store's adjusted trial balance comprise its operating cycle