Arnall Ltd., a British merchandising company, is the exclusivedistributor of a product that is gaining rapid market acceptance.The companyâs revenues and expenses (in British pounds) for thelast three months are given below: Arnall Ltd. Comparative IncomeStatements For the Three Months Ended June 30 April May June Salesin units 1,800 3,200 4,800 Sales revenue £ 313,200 £ 556,800 £835,200 Cost of goods sold 120,600 214,400 321,600 Gross margin192,600 342,400 513,600 Selling and administrative expenses:Shipping expense 41,300 58,100 77,300 Advertising expense 70,00070,000 70,000 Salaries and commissions 104,400 157,600 218,400Insurance expense 9,900 9,900 9,900 Depreciation expense 42,30042,300 42,300 Total selling and administrative expenses 267,900337,900 417,900 Net operating income (loss) £ (75,300) £ 4,500 £95,700 (Note: Arnall Ltd.âs income statement has been recast in thefunctional format common in the United States. The British currencyis the pound, denoted by £.)
Arnall Ltd., a British merchandising company, is the exclusivedistributor of a product that is gaining rapid market acceptance.The companyâs revenues and expenses (in British pounds) for thelast three months are given below: Arnall Ltd. Comparative IncomeStatements For the Three Months Ended June 30 April May June Salesin units 1,800 3,200 4,800 Sales revenue £ 313,200 £ 556,800 £835,200 Cost of goods sold 120,600 214,400 321,600 Gross margin192,600 342,400 513,600 Selling and administrative expenses:Shipping expense 41,300 58,100 77,300 Advertising expense 70,00070,000 70,000 Salaries and commissions 104,400 157,600 218,400Insurance expense 9,900 9,900 9,900 Depreciation expense 42,30042,300 42,300 Total selling and administrative expenses 267,900337,900 417,900 Net operating income (loss) £ (75,300) £ 4,500 £95,700 (Note: Arnall Ltd.âs income statement has been recast in thefunctional format common in the United States. The British currencyis the pound, denoted by £.)
