Task 1: Preparing an Income Statement In 2012, XYZ Inc., a medical equipment distributor, sold 10,000 units of its hospital beds at an
average price of $500 per unit. The company reported estimated returns and allowances of
$200,000. The company purchased 11,000 units of its product from its manufacturer in 2012
at an average cost of $350 per unit. XYZ began 2012 with 1,000 units of its product in
inventory (carried at an average cost of $300 per unit). Operating expenses (excluding
depreciation) in 2012 were $400,000, and the depreciation expense was $100,000. XYZ had
$2,000,000 in debt outstanding throughout all of 2012, which carried an average interest rate
of 10%. The company's tax rate is 40%. Its fiscal year runs from January 1 through
December 31. Given this information, prepare the following documents:
a. XYZ's 2012
b. XYZ's 2012 ending inventory balance (both in unit and in dollar terms)