5 points) Compute the missing numbers in the following income statements: ------
ID: 2348967 • Letter: 5
Question
5 points) Compute the missing numbers in the following income statements: ------------------In Dollars ----------------------- Year 1 Year 2 Year 3 Cost of Goods Sold (a) 19,500 (h) Purchases 15,300 21,000 15,500 Purchase Returns and Allowances 500 300 500 Ending Inventory (b) (d) 4,000 Net Sales 25,000 (e) 26,000 Gross Margin (Profit) 6,700 17,500 (i) Net Income (or loss) (c) 10,500 7,500 Expenses 3,800 (f) 4,300 Beginning Inventory 5,500 (g) (j) (a) $__________________ (b) $__________________ (c) $__________________ (d) $__________________ (e) $__________________ (f) $__________________ (g) $__________________ (h) $__________________ (i) $__________________ (j) $__________________ HINT: Ending inventory from year 1 becomes beginning inventory in year 2; ending inventory from year 2 becomes beginning inventory for year 3.Explanation / Answer
year 1
year 2
year 3
COGS
18300
19500
14200
purchases
15300
21000
15500
purchase R&A
500
300
500
ending inventory
2000
3200
4000
net sales
25000
37000
26000
gross margin
6700
17500
11800
net income(loss)
2900
10500
7500
expenses
3800
7000
4300
beginning inventory
5500
2000
3200
COGS = beginning inventory + purchases - purchase R&A - ending inventory
gross margin = net sales - COGS
net income = gross margin - expenses
6700 = 25000 - a
a = 18,300
18,300 = 5500 + 15300 - 500 - b
b = 2000
c = 6700 - 3800 = 2900
g (beginning inventory of year 2) = ending inventory of year 1 = 2000
f = 17500 - 10500 = 7000
17500 = e - 19500
e = 37000
19500 = 2000 + 21000 - 300 - d
d = 3200
j (beginning inventory of year 3) = ending inventory of year 2 = 3200
7500 = i - 4300
i = 11800
11800 = 26000 - h
h = 14,200
year 1
year 2
year 3
COGS
18300
19500
14200
purchases
15300
21000
15500
purchase R&A
500
300
500
ending inventory
2000
3200
4000
net sales
25000
37000
26000
gross margin
6700
17500
11800
net income(loss)
2900
10500
7500
expenses
3800
7000
4300
beginning inventory
5500
2000
3200
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