Use the following information to answer the next 6 questions: The following sele

Question

Use the following information to answer the next 6 questions: The following selectedinfomationis taken from the books ofthe Rick Compary Cash Accounts receivable Purchases Sales retums and allowances Sales discounts Inventory, 1/1/2007 Inventory, 12/31/2007 Transportation- out Transportation-in Dividends 2,500 3,000 9,000 150 350 3,000 2,000 300 200 1,500 Sales Purchasesretums and allo Purchases discounts Accounts Payable Allowance for Doubtful Accounts Selling expense Administrative expense BadDebt Expense Rent expense Insurance expense 15,000 400 300 3,000 400 400 600 200 1,000 500 wances 12. Net Sales for the period is 13. Cost ofnet purchases for the period is 14. Cost of Goods Available for Sale forthe period is 15. Cost of Goods Sold forthe period is 16. Gross Profit forthe periodis 17. Net Income for the period is

Explanation / Answer

12. Net Sales = Sales - Sales Returns - Sales Discount = $ 15000 - $ 500 = $ 14500

13. Net Purchases = Purchases - Purchase REturn and Discount = 9000 - 700 = $ 8300

14. COGS Available for Sales = Purchase Net + Opening Inventroy = $ 8300 + $ 3000 = $ 11300

15. COGS = Beginning Inventory + Purchases during the period – Ending Inventory

= 3000 + 8300 - 2000 = $ 9300

An expert here is allowed to answer initial 4 sub parts only in case of multi part questions. Hope this helps. Thanks  

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