Question

On January 1, 2020, Blossom Corporation had inventory of $53,000. At December 31, 2020, Blossom had...

On January 1, 2020, Blossom Corporation had inventory of $53,000. At December 31, 2020, Blossom had the following account balances.
Freight-in $4,900
Purchases 508,000
Purchase discounts 7,350
Purchase returns and allowances 2,100
Sales revenue 807,500
Sales discounts 5,200
Sales returns and allowances 10,400

At December 31, 2020, Blossom determines that its ending inventory is $63,000.
Compute Blossom’s 2020 gross profit.
Gross profit $

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Compute Blossom’s 2020 operating expenses if net income is $136,000 and there are no nonoperating activities.
Operating expenses $

Homework Answers

Answer #1

Income statement

sales revenue 807,500
sales discount -5,200
Sales returns and allowances -10,400
Net sales 791,900
Cost of goods sold :
beginning inventory 53,000
Purchases 508,000
Purchase discounts -7,350
Purchase returns and allowances -2,100
Freight-in 4,900
Cost of goods available for sale 556,450
Ending inventory -63,000
Cost of goods sold -493,450
Gross profit $298,450

Net income = $136,000

Gross profit = $298,450

Operating expenses = Gross profit - Net income

= 298,4500 - 136,000

= $162,450

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