Herrera, Inc Required: Prepare an Income Statement for Herrera, Inc

Essay

Herrera, Inc., a merchandiser, sells office supplies. The following information summarizes Herrera's operating activities during the year:
$$\begin{array} { |l| r | } \hline \text { Utilities Expense } & \$ 6,000 \\\hline \text { Rent for Store Expense } & 8,000 \\\hline \text { Sales Commissions Expense } & 4,500 \\\hline \text { Purchases of Merchandise } & 54,000 \\\hline \text { Merchandise Inventory on January 1 } & 30,000 \\\hline \text { Merchandise Inventory on December 31 } & 20,500 \\\hline \text { Sales Revenue } & 108,000 \\\hline\end{array}$$ Required: Prepare an income statement for Herrera, Inc. for the year ended December 31, using the format below. Include a proper heading.
$$\begin{array} { | l | l | l | } \hline \text { Sales Revenue } & \quad \quad \quad & \quad \quad \quad \\\hline \text { Cost of Goods Sold: } & & \\\hline \text { Beginning Inventory } & & \\\hline \text { Purchases } & & \\\hline \text { Cost of Goods Available for Sale } & & \\\hline \text { Ending Inventory } & & \\\hline \text { Cost of Goods Sold } & & \\\hline \text { Gross Profit } & & \\\hline \text { Selling Expenses: } & & \\\hline \text { Sales Commissions Expense } & & \\\hline \text { Administrative Expenses: } & & \\\hline \text { Rent Expense } & & \\\hline \text { Utilities Expense } & & \\\hline \text { Total Operating Expenses } & & \\\hline \text { Operating Income } & & \\\hline\end{array}$$