Reference no: EM132765236

Re-organize the scrambled accounts into the income statement for Pet Land Inc., a pet food and accessories retailer in a small Canadian town.

Problem 1: Calculate Sales Revenue, Cost of Goods Sold, the amount of tax that was paid, the totals for the sections of the statement and determine Gross Margin, Operating Margin, Income Before Tax and Net Income.

Problem 2: Compile Sales Revenue from Gross Sales Revenue and record it on the statement.

Problem 3: Compile the Cost of Goods Sold from the appropriate accounts and add it to the statement. Calculate the Gross Margin and record it on the statement.

Problem 4: List the Operating Expenses on the statement and total it. Calculate the Operating Margin and record it on the statement.

Problem 5: List the Non-operating Expenses on the statement, calculate and record Income Before Tax, calculate and record Taxes and calculate and record Net Income.

Pet Land Inc. Income Statement for the quarter ending September 30, 2020
Accounts Values

Cleaning & Maintenance      5,000
Office Supplies                   2,000
Discounts                             12,300
Fixed Utilities (telephone, heat, hydro)  2,000
Purchases                                      256,750
Depreciation                                    15,000
Beginning Inventory                           42,500
Taxes @ 34%

You calculate

Gross Sales Revenue              697,200
Closing Inventory                      33,250
Returns                                    19,900
Salaries                                   176,000
Interest Expense                         7,000
Advertising & Promotion                25,000
Ending Inventory                          33,250