Allstar Exposure designs and sells advertising services to small, relatively unknown companies. Last month, Allstar had sales commissions costs of $42,000, technology costs of $71,000, and research and development costs of $140,000. Selling expenses were $12,000, and administrative expenses equaled $30,000. Sales totaled $475,000.
Required:
1. Prepare an income statement for Allstar for the past month.
2. Briefly explain why Allstar's income statement has no line item for Cost of Goods Sold.
Labels Add operating expenses For the Next Month For the Past Month Less operating expenses Amount Descriptions Administrative expenses Operating income Operating loss Research and development Sales commissions Sales revenue Selling expenses Technology
Total selling expenses
2. Prepare an income statement for Allstar for the past month. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement. Be sure to complete the statement heading.
2. Complete the statements below that briefly explain why Allstar's income statement has no line item for Cost of Goods Sold.
Allstar has no cost of goods sold line item because the company is a __, rather than a ___.
As such, Allstar has no __.
Instead, costs appear on the income statement as _.