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7 July, 18:10

Salon Secrets is a retail chain specializing in salon-quality hair-care products. During the year, Lady Barber had sales of $ 39,225,000. The company began the year with $ 2,985,000 of merchandise inventory and ended the year with $ 3, 785,000 of inventory. During the year, Lady Barber purchased $ 24,100, 000 of merchandise inventory. The company's selling, general, and administrative expenses totaled $ 7,00,000 for the year. Prepare Lady Barber's income statement for the year.

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  1. 7 July, 18:35
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    Operating income = $

    Explanation:

    Calculation of Cost of goods sold:

    = Purchase during the year + opening Inventory - closing inventory

    = $24,100,000 + $2,985,000 - $3,785,000

    = $23,300,000

    Income statement

    Particular Amount

    Sales revenue $39,225,000

    LESS: Cost of goods sold $23,300,000

    Gross margin $15,925,000

    LESS: Expenses $700,000

    Operating income $15,225,000
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