Supply the missing dollar amounts for the 2017statement of earnings of Kwan Comp
ID: 2398738 • Letter: S
Question
Supply the missing dollar amounts for the 2017statement of earnings of Kwan Company for each of the following independent cases:
Case A Case B Case C Sales revenue $ 8,000 $ 6,000 Sales returns and allowance 150 275 Net sales revenue 5,920 Beginning inventory 11,000 6,500 4,000 Purchases 5,000 9,420 Transportation-in 120 170 Purchase returns 350 600 Cost of goods available for sale 14,790 13,370 Ending inventory 10,000 10,740 Cost of sales 5,400 Gross profit 1,450 Expense (operating) 1,300 520 Pretax earnings (loss) $ 800 $ 500 $ 0Explanation / Answer
Income Statement
Case A
Case B
Case C
Sales revenue
$ 8,000
$ 6,000
$ 6,195
Sales returns and allowance
$ 150
$ 500
$ 275
Net sales revenue
$ 7,850
$ 5,500
$ 5,920
Beginning inventory
$ 11,000
$ 6,500
$ 4,000
Purchases
$ 5,000
$ 8,770
$ 9,420
Transportation-in
$ 100
$ 120
$ 170
Purchase returns
$ 350
$ 600
$ 220
Cost of goods available for sale
$ 15,750
$ 14,790
$ 13,370
Ending inventory
$ 10,000
$ 10,740
$ 7,970
Cost of sales
$ 5,750
$ 4,050
$ 5,400
Gross profit
$ 2,100
$ 1,450
$ 520
Expense (operating)
$ 1,300
$ 950
$ 520
Pretax earnings (loss)
$ 800
$ 500
$ 0
Working for calculation
Case A
Case B
Case C
Sales revenue
$ 8,000
$ 6,000
(5920+275)
Sales returns and allowance
$ 150
$ 275
Net sales revenue
(8000-150)
$ 5,920
Beginning inventory
$ 11,000
$ 6,500
$ 4,000
Purchases
$ 5,000
(14790-6500-120+600)
$ 9,420
Transportation-in
do this after calculating sales (calculate profit with provided figures and then deduct 800 to get transport expense)
$ 120
$ 170
Purchase returns
$ 350
$ 600
(13370-4000-9420-170)
Cost of goods available for sale
calculate after transport in calculation
$ 14,790
$ 13,370
Ending inventory
$ 10,000
$ 10,740
(13370-5400)
Cost of sales
use general rule
(6500+Purchases+120-600-10740)
$ 5,400
Gross profit
use general rule
$ 1,450
(5920-5400)
Expense (operating)
$ 1,300
(1450-500)
$ 520
Pretax earnings (loss)
$ 800
$ 500
$ -
Income Statement
Case A
Case B
Case C
Sales revenue
$ 8,000
$ 6,000
$ 6,195
Sales returns and allowance
$ 150
$ 500
$ 275
Net sales revenue
$ 7,850
$ 5,500
$ 5,920
Beginning inventory
$ 11,000
$ 6,500
$ 4,000
Purchases
$ 5,000
$ 8,770
$ 9,420
Transportation-in
$ 100
$ 120
$ 170
Purchase returns
$ 350
$ 600
$ 220
Cost of goods available for sale
$ 15,750
$ 14,790
$ 13,370
Ending inventory
$ 10,000
$ 10,740
$ 7,970
Cost of sales
$ 5,750
$ 4,050
$ 5,400
Gross profit
$ 2,100
$ 1,450
$ 520
Expense (operating)
$ 1,300
$ 950
$ 520
Pretax earnings (loss)
$ 800
$ 500
$ 0
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