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Ch(6): Income Statement for Merchandise Business132Solution:Manama Fashion CenterIncome StatementFor Year Ended Dec,31 2016Sales178,000Less:Sales returns2,600(-)Sales Discount5,400(8,000)= Net Sales170,000Less: Cost of Goods Sold:Beginning Inventory3,000Purchases106,000Less:Purchases Returns(2,000)Less:Purchases Discount(1,000)= Net Purchases103,000+ Freight In2,000= Cost of Purchases105,000= Cost of Goods Available for Sale108,000Less:Ending Inventory(6,100)= Cost of Goods Sold 101,900= Gross Profit 68,100-Operating Expenses:Freight Out3,900Salaries Expenses12,300Repair Expenses8,200Advertising Expenses 5,400Sales Commission Expenses (170,000%u00d71%)1,700Total Operating Expenses31,500Income from Operations36,600+Other Revenues and Gains:Dividend Revenues4,400Rent Revenues17,00021,400-Other Expenses and Losses:Interest Expenses7,600Loss from Sales Equipment2,200(9,800)= Net Income (Profit)48,200