The following is a listing of some of the balance sheet accounts and all of the

Question

The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Aldine Inc. as they appear on the company’s adjusted trial balance.

2.

Required information

Use the information above to answer the following question. Gross profit would be:

$37,000.

$71,000.

$35,000.

$41,000.

3.

Required information

Use the information above to answer the following question. Income from operations would be:

$6,000.

$11,000.

$10,000.

$12,000.

4.

Required information

Use the information above to answer the following question. Net income would be:

$9,000.

$8,000.

$10,000.

$14,000.

5.

Required information

Use the information above to answer the following question. The gross profit percentage would be closest to:

25.6%.

55.6%.

31.5%.

68.5%.

Accounts Payable $10,000 Accounts Receivable 11,000 Inventory 20,000 Advertising Expense 12,000 Cost of Goods Sold 89,000 Delivery Expense 6,000 Income Tax Expense 2,000 Insurance Expense 1,000 Rent Expense 12,000 Sales Revenue 160,000 Sales Discounts 11,000 Sales Returns & Allowances 19,000

Explanation / Answer

2) Gross profit = Net sales-Cost of goods sold

Net sales = 160000-11000-19000 = 130000

Gross profit = 130000-89000 = 41000

so answer is d) $41000

3) Income from operation = Gross profit-Advertising expense-delivery expense-insurance expense-Rent expense

                                          = 41000-12000-6000-1000-12000

Income from operation = 10000

so answer is c) $10,000

4) Net income = Income from operation -income tax

                       = 10000-2000

Net income = 8000

so answer is b) $8000

5) Gross profit percentage = 41000*100/130000 = 31.5%

so answer is c) 31.5%

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