In 2014, Craig Gonzales opened Craig’s Pets, a small retail shop selling pet supplies. On December 31, 2014, the accounting records for Craig’s Pets showed the following:

Inventory on December 31, 2014 .......... $ 10,100

Inventory on January 1, 2014 ..................   15,400

Sales Revenue ..........................................    58,000

Utilities Expense for the shop .................     3,300

Rent for the shop ......................................    4,500

Sales Commissions ...................................    2,850

Purchases of Merchandise Inventory .....  26,000

Requirements

1. Prepare an income statement for Craig’s Pets for the year ended December 31, 2014.

2. Craig’s Pets sold 3,900 units. Determine the unit cost of the merchandise sold.