This is the question This is what i need Income Statement Calculations O\'Connor

ID: 2474123 • Letter: T

Question

This is the question This is what i need
Income Statement Calculations O'Connor Company's income statement information for 2013 and 2014 (a sole proprietorship) is as follows: 2013 2014 Beginning inventory Sales Purchases Purchases returns and allowances Ending inventory Sales returns and allowances Gross profit Cost of goods sold Seling expenses Transportation-in General and administrative expenses Net income 210,000 130,000 7,000 62,000 4,000 b) 14,000 5,000 2,000 20,000 40,000 6,000 (0 9,000 100,000 120,000 36,000 5,000 43,000

Explanation / Answer

Calculation of Beginning inventory for 2013:

Purchases

$ 130,000

Add: Transport in

$ 2,000

Less: Purchase return and allowances

$ (7,000)

Net Purchases

$ 125,000

Cost of good sold

$ 114,000

Add: Ending inventory

$ 62,000

Less: Net Purchases

$ (125,000)

Beginning inventory for 2013

$ 51,000

Calculation of Gross Profit for 2013:

Sales

$ 210,000

Less: Sales Returns and Allowances

$ (4,000)

Net Sales

$ 206,000

Less: Cost of Goods Sold

$ (114,000)

Gross Profit

$ 92,000

Calculation of Net income for 2013:

Gross Profit

$ 92,000

Less: Selling expenses

$ (35,000)

Less: General and administrative expenses

$ (20,000)

Net income for 2013

$ 37,000