PROBLEM II Using the following information from Char Company. Prepare an income

Question

PROBLEM II Using the following information from Char Company. Prepare an income statement through operating income for the year. Sales? $ 900,000 Finished goods inventory beginning? 45,000 Cost of goods manufactured? 585,000 Finished goods inventory ending? 60,000 Operating expenses? 275,000
PROBLEM II Using the following information from Char Company. Prepare an income statement through operating income for the year. Sales? $ 900,000 Finished goods inventory beginning? 45,000 Cost of goods manufactured? 585,000 Finished goods inventory ending? 60,000 Operating expenses? 275,000
PROBLEM II Using the following information from Char Company. Prepare an income statement through operating income for the year. Sales? $ 900,000 Finished goods inventory beginning? 45,000 Cost of goods manufactured? 585,000 Finished goods inventory ending? 60,000 Operating expenses? 275,000

Explanation / Answer

Cost of goods sold = Cost of goods manufactured + Opening stock of finished goods - Closing stock of finished goods

=585000+45000-60,000=570,000

CHAR CORPORATION

Income Statement

For the Year Ended December 31

         Sales revenue                                                                    $ 9,00,0

Less: Cost of goods sold                                                           $5,70,000

         Gross profit                                                                    3,30,000

Less: Operating expenses:                                                             $2,75000

         Net income                                                                     $55,000

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