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.

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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