Explanation Prepare income statement. Figure (1) Income Statement: The financial statement which shows all the “revenues earned” and “expenses incurred” by the company over a period of time is called as income statement. Working notes: Solve the missing figure (a) cost of goods sold. Cost of goods sold = { Beginning inventory + Net purchases − Ending inventory } = $ 26 , 000 + $ 63 , 000 − $ 20 , 000 = $ 69 , 000 Solve the missing figure (b) gross profit. Gross profit = Net sales – Cost of goods sold = $115,000 –$69,000 = $46,000 Note : Refer to step 1 for cost of goods value and computation. Solve the missing figure (d) cost of goods sold. Cost of goods sold = Net sales – Gross profit = $150,000 – $ 57 , 000 = $ 93 , 000 Solve the missing figure (c) net purchases. Cost of goods sold = { Beginning inventory + Net purchases − Ending inventory } Or, Net purchases = { Cost of goods sold − Beginning inventory + Ending inventory } = $ 93 , 000 − $ 31 , 000 + $ 29 , 000 = $ 91 , 000 Compute (e) net sales. Gross profit = Net sales – Cost of goods sold Or, Net sales = Gross profit + Cost of goods sold = $ 31 , 000 + $ 69 , 000 = $ 100 , 000 Solve the missing figure (f) beginning inventory

Financial Accounting (12th Edition) (What's New in Accounting)

12th Edition

ISBN: 9780134725987

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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Chapter 6, Problem 6.37BE

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To Prepare: The income statement for Company A for the year ended December 31, 2018.

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Chapter 6, Problem 6.36BE

Chapter 6, Problem 6.38BE

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What is the estimated cost of goods sold for the current year? Problem 13-3 (AICPA Adapted) The following information is available for the current year: Wecent history, the entity had a gross profit of 25% on sales. Beginning inventory Purchases Purchase returns Sales Sales returns Sales allowances Uhat is the estimated cost of goods sold for the current year? 520,000 4,120,000 60,000 5,600,000 400,000 100,000 a. 3,360,000 b. 3,830,000 c. 3,900,000 d. 3,825,000

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Chapter 6 Solutions

Financial Accounting (12th Edition) (What's New in Accounting)

Ch. 6 - Ravenna Candles recently purchased candleholders...Ch. 6 - Which inventory system maintains a running record...Ch. 6 - How is cost of goods sold classified in the...Ch. 6 - Snyders total cost of goods available for sale...Ch. 6 - Snyders cost of goods sold using the average-cost...Ch. 6 - Snyders ending inventory using the FIFO method...Ch. 6 - Snyders cost of goods sold using the LIFO method...Ch. 6 - Which U.S. GAAP principle or rule would apply if...Ch. 6 - Corrigan Corporation had beginning inventory of...Ch. 6 - Corrigans gross profit for the period is a.79,000....

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The income statement for Company A for the year ended December 31, 2018.

Solution Summary: The author explains how to prepare the income statement for Company A for the year ended December 31, 2018.

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To Prepare: The income statement for Company A for the year ended December 31, 2018.

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Chapter 6 Solutions