Presented below is a partially completed income statement of Deep Sea, Inc. for

Question

Presented below is a partially completed income statement of Deep Sea, Inc. for 2015. Net Sales $ A Cost of Sales: Beginning Inventory B Net Purchases 138,193 Available for Sale 149,315 Less: Ending Inventory C Cost of Sales 136,225 Gross Profit 72,978 Selling, General and Administrative Expenses D Operating Income $ 9,083 Using the partially completed income statement for Deep Sea, Inc., determine each of the following for 2015. A) Net Sales B) Beginning Inventory C) Ending Inventory D) Selling, General and Administrative Expense

Explanation / Answer

Answer to Part A: Net Sales= Gross Profit + Cost of Sales

NEt Sales = 72,978+136,225

Net Sales= 209,203

Answer to part B: Beginning Inventory = Available for Sale- Net Purchase

Beginning inventory = 149315-138193

Beginning Inventory= 111,22

Answer to Part C: Ending inventory = Cost of Sales- Beginning Inventory-Net Purchase

Ending Inventory = 136,225-111,22-138,193

Ending inventory= 13,090

Answer to Part D: Selling, General and administrative Expenses

Gross Profit- Selling, General and administrative expenses = operating Income

Selling, General and adminstrative expenses = Gross Profit- Net Operating income

Selling, General and adminstrative expenses = 72,978- 9,083

Selling, General and adminstrative expenses = 63,895

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