Q1) For the four cases given, compute net income (or net loss). Caution: Not all of the items listed should be included in the computation of net income.
| |
Case A |
Case B |
Case C |
Case D |
| Cost of goods sold |
$60,000 |
$30,000 |
$60,000 |
$110,000 |
| Interest expense |
$18,000 |
$47,000 |
$25,000 |
$31,000 |
| Cash |
$3,000 |
$4,500 |
$2,100 |
$6,000 |
| Retained earnings |
$50,000 |
$15,000 |
$31,000 |
$70,000 |
| Sales |
$100,000 |
$150,000 |
$70,000 |
$200,000 |
| Accounts payable |
$12,000 |
$20,000 |
$5,000 |
$38,000 |
| Rent revenue |
$5,000 |
$1,000 |
$12,000 |
$10,000 |
| Machinery |
$175,000 |
$60,000 |
$50,000 |
$185,000 |