1000 polnts Home Entertainment is a small familyowned busine

10.00 polnts Home Entertainment is a small, family-owned business that purchases LCD televisions from a reputable manufacturer and sells them at the retail level. The televisions sell, on average, for 51,500 each. The average cost of a television from the manufacturer is $900 Home Entertainment has always kept careful accounting records, and the costs that it incurs in a typical month are as follows: Costs Selling Cost Formula 950 per month 40 per television sold Advertising Delivery of televisions Sales salaries and commissions $ 2.900 per month, plus 4% of sales Utilities Depreciation of sales facilities 3,000 per month 400 per month Administrative Executive salaries Depreciation of office $ 8,000 per month 500 per month $ 1,500 per month, plus S40 per television Clerical Insurance 400 per month During April, the company sold and delivered 150 televisions. Required 1. Prepare an income statement for April using the traditional format with costs organized by function. Traditional Income Statement For the Month Ended April 30 Selling and administrative expenses Selling expenses Total selling Administrative Total administrative expenses otal selling and administrative

Solution

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Home entertinement
Traditional income statement
For the month ended April 30
Television sales		2,25,000
Cost of goods sold		1,35,000
Gross margin		90,000
Selling and administration expenses
Selling expenses:
Advertising	950
Delevery of televisions	6,000
Sales salaries	2,900
Sales commissions	9,000
Utilities	400
Depreciation of sales facilities	3,000
Total selling expenses	22,250
Administrative expenses:
Executive salries	8,000
Derpreciation of office	500
Clerical	7,500
Insurance	400
Total administrative expneses	16,400
Total selling and administrative expenses	38,650
Net income		51,350