Villar Trading

Income Statement

For the year ended December 31, 2012

Net Sales (Note 1) P 1,459,000

Cost of Sales (Note 2) (951,000)

Gross Income 508,000

Other Income(Note 3) 7,000

Expenses (Note 4) ( 256,000)

Operating Income 259,000

Interest Expense (1,200)

Net Income P 257,800

Note 1: Sales 1,500,000

Less: Sales Returns & Allowances 25,000

Sales Discount 16,000 41,000

Net Sales P 1,459,000

Note 2: Merchandise Inventory, Jan 1 P 198,000

Add Net Cost of Purchases:

Purchases 850,000

Add Freight In 15,000

Cost of Delivered Goods 865,000

Less: Purchase Returns & Allowances 19,000

Purchase Discounts 8,000 (27,000) 838,000

Total Goods Available for Sale 1,036,000

Less: Merchandise Inventory, December 31 (85,000)

Cost of Sales P 951,000

Note 3: Commission Income P 4,500

Interest Income 2,500

Other Income P 7,000

Note 4: Freight Out P 16,000

Salaries & Wages 78,000

Taxes Expense 75,000

Utilities Expense 64,000

Doubtful Accounts Expense 3,000

Depreciation Expense 10,000

Rent Expense 10,000

Total Expenses P 256,000