Explanation Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement. Working note (a): Calculate the amount of cost of goods sold: Cost of goods sold = Sales − Gross profit =$96,000 − $ 39 , 000 = $ 57 , 000 Thus, the amount of cost of goods sold is $57,000 . Working note (b): Calculate the amount of selling expenses: Selling expenses = ( Gross profit − Operating income − General expenses ) = ( $39,000 − $ 21 , 800 − $ 7 , 900 ) = $ 9 , 300 Thus, the amount of selling expenses is $9,300 . Working note (c): Calculate the amount of net income: Net income = Operating income − Interest expense =$21,800 − $ 600 = $ 21 , 200 Thus, the amount of net income is $21,200

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Chapter 5, Problem 3E

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Calculate the missing amounts in the income statement of Company R for 2016 and 2017.

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Chapter 5 Solutions

EBK INTERMEDIATE ACCOUNTING: REPORTING

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