Shown below are selected accounts from the adjusted trial balance
Shown below are selected accounts from the adjusted trial balance of Hill Sporting Equipment, Inc., on September 30, 2011, the fiscal year-end. The company’s beginning merchandise inventory was $40,611, and ending merchandise inventory was $38,332.


REQUIRED
1. Prepare a multistep income statement for Hill Sporting Equipment, Inc. Store Salaries Expense, Advertising Expense, Store Supplies Expense, and Depreciation Expense—Store Equipment are selling expenses. The other expenses are general and administrative expenses. Hill Sporting Equipment uses the periodic inventory system. Show details of net sales and operating expenses.
2. Based on your knowledge at this point in the course, how would you use the income statement for Hill Sporting Equipment to evaluate the company’s profitability? What other financial statements should you consider andwhy?
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