8. The financial record of Adam Inc were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical data related to the income statement as below: a. The beginning inventory was $ 138,000. b. Sales discount was $ 5,500 c. 45,000 ordinary shares were outstanding. d. Interest expenses $30,000 e. Income tax rate 30% f. Cost of goods sold $750,000 g. Administrative expenses are 10% of cost of goods sold but only 5% of gross sales. h. Four fifth of the operating expenses related to sales activities. From the foregoing information, prepare an income statement.

8. The financial record of Adam Inc were destroyed by fire at the end of 2020. Fortunately, the controller had kept certain statistical data related to the income statement as below: a. The beginning inventory was $ 138,000. b. Sales discount was $ 5,500 c. 45,000 ordinary shares were outstanding. d. Interest expenses $30,000 e. Income tax rate 30% f. Cost of goods sold $750,000 g. Administrative expenses are 10% of cost of goods sold but only 5% of gross sales. h. Four fifth of the operating expenses related to sales activities. From the foregoing information, prepare an income statement.

Name: 8. The financial record of Adam Inc were destroyed by fireat the end
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Description: 8. The financial record of Adam Inc were destroyed by fireat the end of 2020. Fortunately, the controller had keptcertain statistical data related to the income statementas below:a. The beginning inventory was $ 138,000.b. Sales discount was $ 5,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

8. The financial record of Adam Inc were destroyed by fire
at the end of 2020. Fortunately, the controller had kept
certain statistical data related to the income statement
as below:
a. The beginning inventory was $ 138,000.
b. Sales discount was $ 5,500
c. 45,000 ordinary shares were outstanding.
d. Interest expenses $30,000
e. Income tax rate 30%
f. Cost of goods sold $750,000
g. Administrative expenses are 10% of cost of goods
sold but only 5% of gross sales.
h. Four fifth of the operating expenses related to sales
activities.
From the foregoing information, prepare an income
statement.

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