
Concept explainers
(a)
Net sales
Net sales refer to that amount of sales, which is computed by deducting sales returns and allowances and sales discounts from the total sales of the Company.
To determine: Net sales of the K Company.
(b)
Gross profit
Gross profit is that profit which is computed by deducting cost of goods sold from the net sales (Sales after deducting sales return and allowances, sales discounts).
To determine: Gross profit of the K Company.
(c)
Income from operations
Income from operations refers to that income which is the result of deducting operating expenses from the gross profit of the company. It is calculated in the one of the steps of the multi-step income statement
To determine: Income from operations of the K Company.
(d)
Gross profit rate
It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.
To determine: Gross profit rate of the K Company.

Want to see the full answer?
Check out a sample textbook solution
Chapter 5 Solutions
Accounting Principles - Standalone book
- I need helparrow_forwardFinancial Accountingarrow_forwardMC Company made sales to two customers. Both sales were on credit terms of 2/10, n/30. Customer A purchased $30,000 of goods, returned none, and paid in 9 days. Customer B purchased $40,000 of goods, returned, and was given credit for $4,000 of goods and paid in 25 days. What was the net revenue from these two customers?a. $70,000 b. $66,000 c. $65,400arrow_forward
- the budgeted manufacturing cost per unit?arrow_forwardThe Ivam Department transferred 6,000 units to the finished goods storeroom for a month. There was no beginning work in process inventory, but 800 units were still in process at the end of the month and were 70% complete, and production costs incurred totaled $21,320. Inventory costs would be determined using a unit cost of $____. a. $3.55. b.$3.42. c. $3.25. d. $3.14.arrow_forwardEquipment with a cost of $1,912,000 has an estimated salvage value of $52,000 and an estimated life of 4 years or 47,000 hours. It is to be depreciated using the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used for 9,200 hours?arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





