lo test your knowledge of the relationships of these items, insert the missing figures in the following income statement. Note that gross profit is 40% of net sales and profit is 10% of net sales. Net Sales Gross Sales P Less: Sales Returns & Allowances P45,000 15,000 Sales Discounts Net Sales P Cost of Goods Sold P220,000 Inventory, Jan. 1, 2018 Purchases P985,000 Less: Purchases Returns & Allowances P31,000 Purchases Discounts 20,000 Net Purchases Transportation-In 36,000 Net Cost of Purchases Cost of Goods Available for Sale Less: Inventory, Dec. 31, 2018 260,000 Cost of Goods Sold · Gross Margin from Sales Operating Expenses Profit P620,000 REQUIRED: Complete the missing elements by showing your supporting computations. (No need to prepare the income statement.) What should be the amount of the following? a) Gross Sales b) Total of contra-sales accounts c) Net Sales

Q: Explain the importance of the break - even EBIT.

A: A break-even point is the point of sales at which the operating income or the earnings before…

Q: Explain compound interest.

A: Compound interest.

Q: Explain Computing Holding Period Returns?

A: Introduction: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: Define sacrificing ratio.

A: Definition of Sacrificing Ratio:Sacrificing ratio is the ratio where the old partner give their…

Q: What is a break-even point and how is it calculated?

A: Break-even point: Break-even point is defined as a situation where a firm’s expenses and revenues…

Q: Describe the accounting for correction of errors.

A: The accounting for correction of errors will be explained:

Q: What is the purpose of using the high-low method?

A: High-low method: In the high-low method, the semi variable-cost approximation is calculated by using…

Q: how was the rate calculated, without excel

A: Given, The loan amount is $1000 Rate is 4% Fifth installment is $525

Q: Define Deferred Payments.

A: Liabilities:   Liabilities are referred to as the obligation of the business towards the creditors…

Q: How to estimate the Residual Value?

A: Residual value means value of fixed asset left after the use of fixed assets. Residual value also…

Q: What is the discounting process?

A: Discounting: It is the process where the bill is given to a bank to get the bill discounted before…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is