Tom Reynold is the sole proprietor of Pretty Pets, a business specializing in the sale of high-end pet gifts and accessories. Pretty Pets' sales totaled $ 986 comma 000 during the most recent year. During the year, the company spent $ 52 comma 000 on expenses relating to website maintenance, $ 31 comma 300 on marketing, and $ 29 comma 500 on wrapping, boxing, and shipping the goods to customers. Pretty Pets also spent $ 640 comma 000 on inventory purchases and an additional $ 18 comma 000 on freight-in charges. The company started the year with $ 18 comma 250 of inventory on hand and ended the year with $ 18 comma 400 of inventory. Prepare Pretty Pets' income statement for the most recent year.

Answer and Explanation:

For preparing the income statement first we have to determine the cost of goods sold which is shown below:

Beginning inventory$18,250

Add Inventory purchase ($640,000 + $18,000)  $658,000

Total goods available for sale$676,250

Less: Ending inventory($18,400)

Cost of goods sold$657,850

Now the preparation of the income statement is presented below:

                                           Income statement

Sales  $986,000

Less: Cost of goods sold - $657,850

Gross profit  $328,150

Less: Operating expenses  

Expenses relating to website maintenance-$52,000

Marketing exp-$31,300

wrapping, boxing, and shipping Exp-$29,500

Net income$215,350

d. the economy will face inflation.

you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%