Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells them to retail customers for an average price of $2,600 each. The company’s selling and administrative costs for a typical month are presented below: CostsCost FormulaSelling: Advertising$961 per monthSales salaries and commissions$4,799 per month, plus 4% of salesDelivery of pianos to customers$60 per piano soldUtilities$647 per monthDepreciation of sales facilities$4,956 per monthAdministrative: Executive salaries$13,422 per monthInsurance$702 per monthClerical$2,456 per month, plus $37 per piano soldDepreciation of office equipment$879 per month During August, Marwick’s Pianos, Inc., sold and delivered 56 pianos. Required:1. Prepare a traditional format income statement for August.

Income Statement of business shows all revenues and expenses of the business for the particular…

Answered: During August, Marwick’s Pianos, Inc.,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Marwick’s Pianos, Inc., purchases pianos from a large manufacturer for an average cost of $1,499 per unit and then sells them to retail customers for an average price of $2,600 each. The company’s selling and administrative costs for a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$	961 per month
Sales salaries and commissions	$	4,799 per month, plus 4% of sales
Delivery of pianos to customers	$	60 per piano sold
Utilities	$	647 per month
Depreciation of sales facilities	$	4,956 per month
Administrative:
Executive salaries	$	13,422 per month
Insurance	$	702 per month
Clerical	$	2,456 per month, plus $37 per piano sold
Depreciation of office equipment	$	879 per month

During August, Marwick’s Pianos, Inc., sold and delivered 56 pianos.

Required:

1. Prepare a traditional format income statement for August.

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