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Merchandising Income Statement Guide

Milden Company is a merchandiser that plans to sell 25,000 units next quarter at $52 per unit. It provided cost estimates including $22 cost of goods sold per unit and expenses such as $172,000 in advertising, 5% sales commissions, $54,000 + $6 per unit in shipping, and $82,000 in salaries. The summary prepares a traditional income statement showing sales of $1,300,000, cost of goods sold of $550,000, gross margin of $750,000, total expenses of $584,200, and net operating income of $165,800.

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296 views2 pages

Merchandising Income Statement Guide

Milden Company is a merchandiser that plans to sell 25,000 units next quarter at $52 per unit. It provided cost estimates including $22 cost of goods sold per unit and expenses such as $172,000 in advertising, 5% sales commissions, $54,000 + $6 per unit in shipping, and $82,000 in salaries. The summary prepares a traditional income statement showing sales of $1,300,000, cost of goods sold of $550,000, gross margin of $750,000, total expenses of $584,200, and net operating income of $165,800.

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Abdiasis
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

7/24/2020 Assignment Print View

 
1.  
 

Milden Company is a merchandiser that plans to sell 25,000 units during the next quarter at a selling price of $52 per unit. The company
also gathered the following cost estimates for the next quarter:

Cost Cost Formula


Cost of good sold $22 per unit sold
Advertising expense $172,000 per quarter
Sales commissions 5% of sales
Shipping expense $54,000 per quarter + $6.00 per unit sold
Administrative salaries $82,000 per quarter
Insurance expense $9,200 per quarter
Depreciation expense $52,000 per quarter

Required:
1. Prepare a contribution format income statement for the next quarter.
2. Prepare a traditional format income statement for the next quarter.

Complete this question by entering your answers in the tabs below.

Required 1 Required 2

Prepare a traditional format income statement for the next quarter.

Milden Company
Traditional Format Income Statement
For the Next Quarter
Sales $ 1,300,000
Cost of goods sold 550,000
Gross margin 750,000
Selling and administrative expenses:
Sales commission $ 65,000
Shipping expense 204,000
Insurance expense 9,200
Advertising expense 172,000
Administrative salaries 82,000
Depreciation expense 52,000

Total selling and administrative expenses 584,200


Net operating income $ 165,800

 Required 1 Required 2 

https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252714196890775&wid=1325271419… 1/2
7/24/2020 Assignment Print View
Garrison 16e Rechecks 2017-08-07, 2017-09-18, 2018-07-27

References

Financial Statements Difficulty: 2 Medium Learning Objective: 01-06 Prepare income statements for
a merchandising company using the traditional and
contribution formats.

https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252714196890775&wid=1325271419… 2/2

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