Using the selected account balances at December 31, 20xx for Nature's Adventure Store below, pre-

LO 4 Preparation of Income Statement: Perpetual Inventory System pare an income statement for the year ended December 31, 20xx. The company uses the perpetual inventory system, and Freight In has not been included in Cost of Goods Sold.

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Account Name Debit Credit Sales Sales Returns and Allowances 23,500 280,000 475,000 Cost of Goods Sold Freight In 13,500 Selling Expenses 43,000 General and Administrative Expenses 87,000 Income Taxes 12,000