Lane Antiques uses the periodic inventory system to account for its inventory tr

Question

Lane Antiques uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Lane’s records for: beginning balance in inventory, $25,000; purchases, $306,900; purchase returns and allowances, $13,100; sales, $726,000; sales returns and allowances, $6,310; freight-in, $1,860; and operating expenses, $51,600. A physical count indicated that $24,900 of merchandise was on hand at the end of the accounting period. Prepare a multistep income statement.

Explanation / Answer

Sales $ 726,000 Less: Sales returns $      6,310 Net sales $ 719,690 Less: Cost of goods sold $ 295,760 Opening stock $    25,000 Add: Purchases $ 306,900 Less: Closing stock (Valued) $    24,900 Less: Purchase returns $    13,100 Add: Freight in $      1,860 Gross profit $ 423,930 Less: Operating expenses $    51,600 Net operating income $ 372,330

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.