Problem:
Worry Company sells office supplies. The following information summarizes Best's operating activities for 2014:
Utilities for store $6,000
Rent for store $8,000
Sales commissions $4,500
Purchases of merchandise $54,000
Inventory on January 1, 2012 $30,000
Inventory on December 31, 2012 $20,500
Sales revenue $108,000
Required: Prepare an income statement for Worry Company, a merchandiser, for the year ended December 31, 2014 using the format below. Please include a vertical analysis rounded to the nearest tenth of a percent.
Sales revenue
Cost of goods sold
Beginning inventory
Purchases
Cost of goods available for sale
Ending inventory
Cost of goods sold
Gross profit
Selling expenses
Sales commissions
General expenses
Rent expense
Utilities expense
Total operating expenses
Net income/(loss)