Smith, Inc. Allen, Inc. Net Sales Revenue $ 101,000 (d) Cost of Goods Sold: Beginning Merchandise Inventory (a) 29,000 Purchases and Freight In 50,000 (e) Cost of Goods Available for Sale (b) 89,000 Ending Merchandise Inventory (2,200) (2,200) Cost of Goods Sold 61,000 (1) Gross Profit 40,000 114,000 Selling and Administrative Expenses (c) 84,000 Operating Income $ 12,000 (g)

Smith, Inc. Allen, Inc. Net Sales Revenue $ 101,000 (d) Cost of Goods Sold: Beginning Merchandise Inventory (a) 29,000 Purchases and Freight In 50,000 (e) Cost of Goods Available for Sale (b) 89,000 Ending Merchandise Inventory (2,200) (2,200) Cost of Goods Sold 61,000 (1) Gross Profit 40,000 114,000 Selling and Administrative Expenses (c) 84,000 Operating Income $ 12,000 (g)

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

Computing cost of goods sold and operating income, merchandising company

Consider the following partially completed income statements for merchandising companies and compute the missing amounts:

Smith, Inc.
Allen, Inc.
Net Sales Revenue
$ 101,000
(d)
Cost of Goods Sold:
Beginning Merchandise Inventory
(a)
29,000
Purchases and Freight In
50,000
(e)
Cost of Goods Available for Sale
(b)
89,000
Ending Merchandise Inventory
(2,200)
(2,200)
Cost of Goods Sold
61,000
(1)
Gross Profit
40,000
114,000
Selling and Administrative Expenses
(c)
84,000
Operating Income
$ 12,000
(g)

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