Problem 1: Compute missing amounts in determining net income.
Presented below are the components in Clearwater Company's income statement. Determine the missing amounts.
|
|
Sales
|
Cost of Goods Sold
|
Gross Profit
|
Operating Expenses
|
Net Income
|
|
(a)
|
$75,000
|
?
|
$28,600
|
?
|
$10,800
|
|
(b)
|
$108,000
|
$70,000
|
?
|
?
|
$29,500
|
|
(c)
|
?
|
$71,900
|
$99,600
|
$39,500
|
?
|
Problem 2: Prepare sales revenues section of income statement.
Piccola Company provides the following information for the month ended October 31, 2006: Sales on credit $280,000, cash sales $100,000 sales discounts $13,000, sales returns and allowances$21,000. Prepare the sales revenues section of the income statement based on this information.
Problem 3: Compute net purchases and cost of goods purchased.
Assume that E. Guard Company uses a periodic inventory system and has these account balances: Purchases $400,000; Purchase Returns and Allowances $11,000; Purchase Discounts $8,000; and Freight-in $16,000. Determine net purchases and cost of goods purchased.