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

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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