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The following income statement was drawn from the records of Butler Company, a merchandising firm: BUTLER COMPANY Income Statement For the Year Ended December 31,
The following income statement was drawn from the records of Butler Company, a merchandising firm: |
BUTLER COMPANY Income Statement For the Year Ended December 31, 2014 | |||
Sales revenue (6,500 units $169) | $ | 1,098,500 | |
Cost of goods sold (6,500 units $82) | (533,000 | ) | |
Gross margin | 565,500 | ||
Sales commissions (10% of sales) | (109,850 | ) | |
Administrative salaries expense | (82,000 | ) | |
Advertising expense | (32,000 | ) | |
Depreciation expense | (49,000 | ) | |
Shipping and handling expenses (6,500 units $4) | (26,000 | ) | |
Net income | $ | 266,650 | |
Required | |
a. | Reconstruct the income statement using the contribution margin format. |
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