Answered: Using the above data, calculate…

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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Question

Selected data for three companies are given below. All inventory amounts are ending balances and all amounts are in millions.

1(Click

the icon to view the data.)

Using the above data, calculate operating income for each company. (Enter amounts in millions as provided to you in the problem statement, $X.)

Begin by calculating the operating income for Company A.

Company A
(1)
(2)
Gross Profit
Selling and Administrative Expenses:
	(3)
	(4)
Total Selling and Administrative Expenses
Operating Income

Now calculate the operating income for Company B.

Company B
(5)
Expenses:
	(6)
	(7)
Total Expenses
Operating Income

Finally, calculate the operating income for Company C.

Company C
(8)
(9)
Gross Profit
Selling and Administrative Expenses:
	(10)
	(11)
Tota Selling and Administrative Expenses
Operating Income

1: Data Table

Company A		Company B		Company C
Cash	$7		Wages Expense	$28	Administrative Expenses	$3
Net Sales Revenue	41		Equipment	24	Cash	9
Finished Goods Inventory	2		Accounts Receivable	5	Net Sales Revenue	42
Cost of Goods Sold	32		Service Revenue	54	Selling Expenses	4
Selling Expenses	5		Cash	12	Merchandise Inventory	22
Equipment	51		Rent Expense	6	Equipment	52
Work-in-Process Inventory	4				Accounts Receivable	15
Accounts Receivable	9				Cost of Goods Sold	32
Cost of Goods Manufactured	28
Administrative Expenses	2
Raw Materials Inventory	9

(1)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Manufactured

Cost of Goods Sold

Equipment

Finished Goods Inventory

Net Sales Revenue

Raw Materials Inventory

Selling Expenses

Work-in-Process Inventory

(2)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Manufactured

Cost of Goods Sold

Equipment

Finished Goods Inventory

Net Sales Revenue

Raw Materials Inventory

Selling Expenses

Work-in-Process Inventory

(3)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Manufactured

Cost of Goods Sold

Equipment

Finished Goods Inventory

Net Sales Revenue

Raw Materials Inventory

Selling Expenses

Work-in-Process Inventory

(4)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Manufactured

Cost of Goods Sold

Equipment

Finished Goods Inventory

Net Sales Revenue

Raw Materials Inventory

Selling Expenses

Work-in-Process Inventory

(5)

Accounts Receivable

Cash

Equipment

Rent Expense

Service Revenue

Wages Expense

(6)

Accounts Receivable

Cash

Equipment

Rent Expense

Service Revenue

Wages Expense

(7)

Accounts Receivable

Cash

Equipment

Rent Expense

Service Revenue

Wages Expense

(8)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Sold

Equipment

Merchandise Inventory

Net Sales Revenue

Selling Expenses

(9)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Sold

Equipment

Merchandise Inventory

Net Sales Revenue

Selling Expenses

(10)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Sold

Equipment

Merchandise Inventory

Net Sales Revenue

Selling Expenses

(11)

Accounts Receivable

Administrative Expenses

Cash

Cost of Goods Sold

Equipment

Merchandise Inventory

Net Sales Revenue

Selling Expenses

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