Explanation Income statement: The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earnings statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses. Working notes: For case A: Determine the amount of total goods available for sale: Goods available for sale for case A } = Beginning inventory + Purchases = $ 100 + $ 7 00 = $ 8 00 (1) Determine the amount of Cost of goods sold: Cost of goods sold for case A } = Goods available for sale − Ending inventory = $800 − $500 = $300 (2) Determine the amount of gross profit: Gross profit for case A = Sales − Cost of goods sold = $650 − $300 = $350 (3) Determine the amount of gross profit: Pretax income = Gross profit for case A − Expenses = $350 − $200 = $150 (4) For Case B: Determine the amount of total goods available for sale: Goods available for sale for case B } = Beginning inventory + Purchases = $ 2 00 + $ 9 00 = $ 1 , 1 00 (5) Determine the amount of gross profit: Gross profit for case B = Expenses + Pretax income = $150 + $150 = $300 (6) Determine the amount of Cost of goods sold: Goods of goods sold = Net sales revenue − Gross profit = $11,000 − $ 300 = $800 (7) Determine the amount of ending inventory: Ending inventory = Goods available for sale − Cost of goods sold = $1,100 − $800 = $300 (8) For Case C: Determine the amount of total goods available for sale: Goods available for sale = Ending inventory + Cost of goods sold = $300 +

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ISBN: 9781266449512

Author: Libby

Publisher: MCG

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Chapter 7, Problem 3E

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Identify the missing dollar amounts for the income statement for each of the following independent case.

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Chapter 7 Solutions

FINANCIAL ACCOUNTING (LL)

Ch. 7 - Prob. 3Q Ch. 7 - 4. Define goods available for sale. How does it...Ch. 7 - 5. Define beginning inventory and ending...Ch. 7 - 6. The chapter discussed tour inventory costing...Ch. 7 - 7. Explain how income can be manipulated when the...Ch. 7 - 8. Contrast the effects of LIFO versus FIFO on...Ch. 7 - 9. Contrast the income statement effect of LIFO...Ch. 7 - Prob. 10Q Ch. 7 - Explain briefly the application of the lower of...Ch. 7 - 12. When a perpetual inventory system is used,...

Ch. 7 - 1. Consider the following information: ending...Ch. 7 - 2. The inventory costing method selected by a...Ch. 7 - 3. Which of the following is not a component of...Ch. 7 - 4. Consider the following information: beginning...Ch. 7 - 5. Consider the following information: beginning...Ch. 7 - 6. An increasing inventory turnover...Ch. 7 - Prob. 7MCQ Ch. 7 - Which of the following regarding the lower of cost...Ch. 7 - 9. Which inventory method provides a better...Ch. 7 - Which of the following is false regarding a...Ch. 7 - Matching Inventory Items to Type of Business Match...Ch. 7 - Recording the Cost of Purchases for a...Ch. 7 - Identifying the Cost of Inventories for a...Ch. 7 - JCPenney Company, Inc., is a major department...Ch. 7 - M7-5 Matching Financial Statement Effects to...Ch. 7 - M7-6 Matching Inventory Costing Method Choices to...Ch. 7 - M7-7 Reporting Inventory under Lower of Cost or...Ch. 7 - M 7-8 Determining the Effects of Inventory...Ch. 7 - Determining the Financial Statement Effects of...Ch. 7 - Based on its physical count of inventory in its...Ch. 7 - Prob. 2E Ch. 7 - Prob. 3E Ch. 7 - Abercrombie and Fitch is a leading retailer of...Ch. 7 - Nittany Company uses a periodic inventory system....Ch. 7 - E7-6 Calculating Ending Inventory and Cost of...Ch. 7 - Emily Company uses a periodic inventory system. At...Ch. 7 - Givoly Inc. uses a periodic inventory system. At...Ch. 7 - Evaluating the Choice among Three Alternative...Ch. 7 - Following is partial information for the income...Ch. 7 - Daniel Company uses a periodic inventory system....Ch. 7 - H.T. Tan Company is preparing the annual financial...Ch. 7 - Sanchez Company was formed on January 1 of the...Ch. 7 - Dell Inc. is the leading manufacturer of personal...Ch. 7 - E7-1 5 Analyzing and Interpreting the Effects of...Ch. 7 - The following note was contained in a recent Ford...Ch. 7 - BorgWarner Inc. is a leading global supplier of...Ch. 7 - Several years ago, the financial statements of...Ch. 7 - Analyzing and Interpreting the Impact of an...Ch. 7 - Prob. 20E Ch. 7 - E7-21 (Chapter Supplement A) Analyzing the Effects...Ch. 7 - Assume that a retailer’s beginning inventory and...Ch. 7 - Prob. 23E Ch. 7 - Travis Company has just completed a physical...Ch. 7 - Prob. 2P Ch. 7 - Prob. 3P Ch. 7 - Analyzing and Interpreting Income Manipulation...Ch. 7 - Prob. 5P Ch. 7 - Jaffa Company prepared its annual financial...Ch. 7 - Evaluating the Effects of Manufacturing Changes on...Ch. 7 - An annual report for International Paper Company...Ch. 7 - The income statement for Pruitt Company summarized...Ch. 7 - P7-1 0 (Chapter Supplement A) Analyzing LIFO and...Ch. 7 - Prob. 1AP Ch. 7 - Prob. 2AP Ch. 7 - Prob. 3AP Ch. 7 - Analyzing and Interpreting the Effects of...Ch. 7 - Evaluating the Choice of Inventory Method When...Ch. 7 - Finding Financial Information Refer to the...Ch. 7 - Prob. 2CP Ch. 7 - Refer to the financial statements of American...Ch. 7 - Using Financial Reports: Interpreting the Effect...Ch. 7 - Prob. 5CP Ch. 7 - Prob. 6CP Ch. 7 - Prob. 7CP

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