81. a) Rockwell Company reported the following amounts on its2009 income stateme
ID: 2457650 • Letter: 8
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81. a) Rockwell Company reported the following amounts on its2009 income statement: Purchases, $100,000; Beginning 2009inventory, $20,000; and Cost of goods sold, $110,000. Therefore,the 2009 ending inventory was ? b) Thorton Co. reported the following data atyear-end. Sales, $500,000; beginning inventory, $40,000;ending inventory, $45,000; cost of goods sold, $350,000; and grossmargin, $150,000. What was the amount of merchandise purchasedduring the year? c) The following information was taken from the 2007 incomestatement of Cobra Company: Pretax income, $12,000; Total operatingexpenses, $20,000; Sales revenue, $120,000. Compute cost of goodssold. ? d) The following information was taken from the 2007 incomestatement of Milburn Company: Pretax income, $12,000; Totaloperating expenses (not including income taxes), $20,000; Salesrevenue, $120,000; Beginning inventory, $8,000; and Purchases,$90,000. Compute the amount of the ending inventory. ? e) Sheffield Company had the followinginformation taken from its 2006 adjusted trial balance: Sales,$400,000; Sales Discounts, $12,000; Beginning Inventory, $20,000;and Purchases, $200,000. A physical count of the merchandise onhand at the end of the year showed $25,000. Compute the grossmargin (gross profit) that would appear in the incomestatement. 81. a) Rockwell Company reported the following amounts on its2009 income statement: Purchases, $100,000; Beginning 2009inventory, $20,000; and Cost of goods sold, $110,000. Therefore,the 2009 ending inventory was ? b) Thorton Co. reported the following data atyear-end. Sales, $500,000; beginning inventory, $40,000;ending inventory, $45,000; cost of goods sold, $350,000; and grossmargin, $150,000. What was the amount of merchandise purchasedduring the year? c) The following information was taken from the 2007 incomestatement of Cobra Company: Pretax income, $12,000; Total operatingexpenses, $20,000; Sales revenue, $120,000. Compute cost of goodssold. ? d) The following information was taken from the 2007 incomestatement of Milburn Company: Pretax income, $12,000; Totaloperating expenses (not including income taxes), $20,000; Salesrevenue, $120,000; Beginning inventory, $8,000; and Purchases,$90,000. Compute the amount of the ending inventory. ? e) Sheffield Company had the followinginformation taken from its 2006 adjusted trial balance: Sales,$400,000; Sales Discounts, $12,000; Beginning Inventory, $20,000;and Purchases, $200,000. A physical count of the merchandise onhand at the end of the year showed $25,000. Compute the grossmargin (gross profit) that would appear in the incomestatement.Explanation / Answer
A. Beginninginventory 20,000 +purchases 100,000 COGAS 120,000 - cost of goodssold 110,000 Endinginventory 10,000 B. Cost of goods sold + ending inventory - beg.inventory=purchases 350,000 + 45,000 - 40,000 =355,000 C. Pre - tax income + operating expenses = Gross margin Sales - gross margin = cost of goodssold. 12,000 + 20,000 = 32,000 (gross margin) 120,000 - 32,000 = 88,000 ( cost of goods sold) Cost of goods sold is $ 88,000 D.Beginning inventory + Purchases - cost of goods sold = Ending inventory 8,000 + 90,000 -88,000 = 10,000 Ending inventory is $ 10,000 E. Sales 400,000 COGS calculation - discounts 12,000 Beginventory 20,000 Netsales 388,000 + purchases 200,000 -COGS 195,000 220,000 Grossmargin 193,000 - Ending inventory 25,000 COGS 195,000
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