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At the end of the fiscal year August 31 20x6 selected accounts from the adjusted trial balance for Mikhail’s Delivery Inc appeared as follows Mikhail’s Delivery Inc Partial Adjusted

At the end of the fiscal year, August 31, 20x6, selected accounts from the adjusted trial balance for Mikhail’s Delivery, Inc., appeared as follows:

 

Mikhail’s Delivery, Inc.

Partial Adjusted Trial Balance

August 31, 20x6

Sales

 

$162,000

Sales Returns and Allowances

$ 2,000

Cost of Goods Sold

61,400

Freight-In

2,300

Store Salaries Expense

32,625

Office Salaries Expense

12,875

Advertising Expense

24,300

Rent Expense

2,400

Insurance Expense

1,200

Utilities Expense

1,560

Store Supplies Expense

2,880

Office Supplies Expense

1,175

Depreciation Expense–Store Equipment

1,050

Depreciation Expense–Office Equipment

800

Income Taxes

2,000

       

Required

1. Using the information given, prepare an income statement for Mikhail’s Delivery, Inc. Store Salaries Expense; Advertising Expense; Stores Supplies Expense; and Depreciation Expense–Store Equipment are selling expenses. The other expenses are general and administrative expenses. The company uses the perpetual inventory system. Show details of net sales and operating expenses.

2. User Insight: Based on your knowledge at this point in the course, how would you use the income statement for Mikhail’s Delivery, Inc. to evaluate the company’s profitability? What other financial statement should be considered and why?

Aug 13 2020 View more View Less

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