Here is a proposed income statement of a children’s clothing store:

List and describe any shortcomings of this statement.

Transcribed Image Text:

Kids 2 Klad Statement of Profit and Loss, December 31, 20X1 Revenues: Sales $1,300,000 Increase in market value of land and building 50,000 Cash received from loan 200,000 S1,550,000 Deduct expenses: Advertising $ 100,000 Sales commissions 60,000 Utilities 20,000 Wages 150,000 Dividends 200,000 Cost of clothes purchased 800,000 1,330,00X0 Net profit S 220,0XX)