The following information was taken from the accounts of Colleen's Cookies, a bakery, on December 31, Year 5. Accounts payable $1,800 Accounts receivable $1,200 Advertising expense $600 Cash $1,400 Common stock $600 Cost of goods sold $1,000 Gain on sale of land $500 Interest expense $100 Merchandise inventory $1,300 Loss on sale of equipment $250 Retained earnings Sales revenue Salaries expense Rent expense $1,500 $3,000 $300 $200 a) What is the value of the Gross Margin on the Year 5 Income Statement? b) What is the value of the Operating Income (Loss) on the Year 5 Income Statement? c) What is the value of the Net Income (Loss) on the Year 5 Income Statement?

Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter9: Receivables
Section: Chapter Questions
Problem 27E
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The following information was taken from the accounts of Colleen's Cookies, a bakery, on December 31, Year 5.
Accounts payable
$1,800
Accounts receivable
$1,200
Advertising expense
$600
Cash
$1,400
Common stock
$600
Cost of goods sold
$1,000
Gain on sale of land
$500
Interest expense
$100
Merchandise inventory
$1,300
Loss on sale of equipment $250
Retained earnings
Sales revenue
Salaries expense
Rent expense
$1,500
$3,000
$300
$200
a) What is the value of the Gross Margin on the Year 5 Income Statement?
b) What is the value of the Operating Income (Loss) on the Year 5 Income Statement?
c) What is the value of the Net Income (Loss) on the Year 5 Income Statement?
Transcribed Image Text:The following information was taken from the accounts of Colleen's Cookies, a bakery, on December 31, Year 5. Accounts payable $1,800 Accounts receivable $1,200 Advertising expense $600 Cash $1,400 Common stock $600 Cost of goods sold $1,000 Gain on sale of land $500 Interest expense $100 Merchandise inventory $1,300 Loss on sale of equipment $250 Retained earnings Sales revenue Salaries expense Rent expense $1,500 $3,000 $300 $200 a) What is the value of the Gross Margin on the Year 5 Income Statement? b) What is the value of the Operating Income (Loss) on the Year 5 Income Statement? c) What is the value of the Net Income (Loss) on the Year 5 Income Statement?
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