E2-35B Prepare a retailer’s income statement (Learning Objective 5)

Jared Tustin is the sole proprietor of Pretty Pets, a business specializing in the sale of high-end pet gifts and accessories. Pretty Pets’ sales totaled $1,125,000 during the most recent year. During the year, the company spent $58,000 on expenses relating to website maintenance, $32,500 on marketing, and $28,500 on wrapping, boxing, and shipping the goods to customers. Pretty Pets also spent $636,000 on inventory purchases and an additional

$22,000 on freight-in charges. The company started the year with $18,000 of inventory on hand, and ended the year with $16,000 of inventory. Prepare Pretty Pets’ income statement for the most recent year.