Problem 8-27 (continued)
4.
Shilow Company
Income Statement
For the Quarter Ended June 30
Sales ($60,000 + $72,000 + $90,000) …….
$222,000
Cost of goods sold:
Beginning inventory (Given) ……………….
$ 36,000
Add purchases (Part 2) ………………………
159,300
Goods available for sale ……………………..
195,300
Ending inventory (Part 2) …………………..
28,800
166,500
*
Gross margin ……………………………………..
55,500
Selling and administrative expenses:
Commissions (12% of sales) ……………….
26,640
Rent ($2,500 × 3) …………………………….
7,500
Depreciation ($900 × 3) …………………….
2,700
Other expenses (6% of sales) ……………..
13,320
50,160
Net operating income ………………………….
5,340
Interest expense (Part 4) ……………………..
230
Net income ……………………………………….
$ 5,110
* A simpler computation would be: $222,000 × 75% = $166,500.
