please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) ### Exercise 4-1 (Static) Computing Revenues, Expenses, and Income**Objective:** To fill in the blanks in the following separate income statements labeled a through e.#### Income Statements Overview| Description | a | b | c | d | e ||-----------------------------------|----------|---------|----------|---------|---------|| **Sales** | $62,000 | $43,500 | $55,000 | - | $25,600 || **Cost of Goods Sold** | | | | | || Merchandise Inventory, Beginning | | $17,050 | $7,500 | $8,000 | $4,560 || Total Cost of Merchandise Purchases | $38,000 | | $9,000 | $32,000 | $6,600 || Merchandise Inventory, Ending | $34,050 | $16,000 | | $9,000 | $6,600 || Cost of Goods Sold | | | $12,750 | | $7,000 || **Gross Profit** | $10,000 | $10,650 | $12,150 | - | $6,000 || **Expenses** | $10,000 | | $1,500 | $3,600 | || **Net Income (Loss)** | $16,850 | $600 | - | $42,000 | |#### Explanation of Components:- **Sales:** Represents the total revenue generated from goods sold or services provided. Each column represents sales figures for different income statements (a to e).- **Cost of Goods Sold (COGS):** Cost associated with producing or purchasing the goods that were sold. This section involves calculating the beginning inventory, adding the purchases, and subtracting the ending inventory to find the COGS.- **Gross Profit:** Calculated by subtracting COGS from sales. It indicates the basic profitability of the core business activities without accounting for overheads, payroll, taxation, or other financial expenditures.- **Expenses:** Outlays related to operations such as salaries, rent, utilities, and other administrative costs.- **Net Income (Loss):** The final profit or loss after all expenses have

Answered: Book Hint Print rences Exercise 4-1…

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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please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)

### Exercise 4-1 (Static) Computing Revenues, Expenses, and Income

**Objective:** To fill in the blanks in the following separate income statements labeled a through e.

#### Income Statements Overview

| Description | a | b | c | d | e |
|-----------------------------------|----------|---------|----------|---------|---------|
| **Sales** | $62,000 | $43,500 | $55,000 | - | $25,600 |
| **Cost of Goods Sold** | | | | | |
| Merchandise Inventory, Beginning | | $17,050 | $7,500 | $8,000 | $4,560 |
| Total Cost of Merchandise Purchases | $38,000 | | $9,000 | $32,000 | $6,600 |
| Merchandise Inventory, Ending | $34,050 | $16,000 | | $9,000 | $6,600 |
| Cost of Goods Sold | | | $12,750 | | $7,000 |
| **Gross Profit** | $10,000 | $10,650 | $12,150 | - | $6,000 |
| **Expenses** | $10,000 | | $1,500 | $3,600 | |
| **Net Income (Loss)** | $16,850 | $600 | - | $42,000 | |

#### Explanation of Components:

- **Sales:** Represents the total revenue generated from goods sold or services provided. Each column represents sales figures for different income statements (a to e).

- **Cost of Goods Sold (COGS):** Cost associated with producing or purchasing the goods that were sold. This section involves calculating the beginning inventory, adding the purchases, and subtracting the ending inventory to find the COGS.

- **Gross Profit:** Calculated by subtracting COGS from sales. It indicates the basic profitability of the core business activities without accounting for overheads, payroll, taxation, or other financial expenditures.

- **Expenses:** Outlays related to operations such as salaries, rent, utilities, and other administrative costs.

- **Net Income (Loss):** The final profit or loss after all expenses have

Expert Solution

Step 1: Introducing Income Statement

INCOME STATEMENT

Income Statement is one of the Important Financial Statements of the Company. Income Statement Show's the profitability of the Company. Income Statement includes Total Revenue From Operation and Total Expenses related to Business Operation.

Gain & Loss under Income Statement is Computed :—

= Total Revenue From Operation - Total Expenses related to Business Operation.

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