Cannon Company Operates a Clothing Store That Reported the Following

Cannon Company operates a clothing store that reported the following operating results for the current year:
Required: Prepare an income statement for Cannon Company using the contribution margin format. $\begin{array}{|l|c|}\hline\text { Income Statement }\\\hline \text { Sales revenue } & \$ 2,000,000 \\\hline \text { Cost of goods sold } & (1,200,000) \\\hline \text { Gross margin } & \$ 800,000 \\\hline \text { Employee commissions and bonuses ( } \% \% \text { of sales) } & (100,000) \\\hline \text { Depreciation expense } & (150,000) \\\hline \text { Salaries expense } & (260,000) \\\hline \text { Shipping and delivery expense (2\% of sales) } & (40,000) \\\hline \text { Advertising expense } & (80,000) \\\hline \text { Net income } & \$ 170,000 \\\hline\end{array}$

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