Cotton White, Inc. makes specialty clothing for chefs. The company reported the

Question

Cotton White, Inc. makes specialty clothing for chefs. The company reported the following costs for 2009:

 

 

Prepare the company's income statement for 2009 assuming that all inventory accounts (Raw Materials, Work in Process, and Finished Goods) had a zero balance at both the beginning and end of the year. Cotton White's sales revenue for the year was $735,000. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

 

 

 

$  

    Factory rent $36,000     Company advertising 24,000     Wages paid to seamstresses 75,000     Depreciation on salespersons' vehicles 30,000     Thread 1,000     Utilities for factory 23,000     Cutting room supervisor's salary 30,000     President's salary 75,000     Premium quality cotton material 40,000     Buttons 750     Factory insurance 18,000     Depreciation on sewing machines 6,000     Wages paid to cutters 50,000  

Explanation / Answer

Sales Revenue                                                   $735,000
Less: Cost of Goods Sold
Beginning FG inventory                               0
Add : Cost of goods manufactured   $279,750
Cost of goods available for sale        $279,750
Less: Ending FG inventory                           0
Cost of Goods Sold                                           $279,750

Gross Profit                                                     $455,250
Less: Operating(Period) expenses                     $129,000
Income from operations                                   $326,250

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