Question

Income Statement for a Merchandiser

Solve for the missing amounts corresponding to the letters in the following income statement for Carpenters Department Store Inc.

Net sales					$136,500
Cost of goods sold:
Beginning inventory			$26,690
Net purchases		$(a)
Transportation-in		7,150
Cost of goods purchased			89,340
Cost of goods available for sale			$116,030
Ending inventory			(c)
Cost of goods sold					(b)
Gross profit					$43,680
Operating expenses					(d)
Income before tax					$29,700
Income tax expense					10,400
Net income					$(e)

Item	Amount
a. Net purchases	$
b. Cost of goods sold	$
c. Ending inventory	$
d. Operating expenses	$
e. Net income	$

Answer 1

Solution

Item	Amount
a. Net purchases	$82,190.00
b. Cost of goods sold	$92,820.00
c. Ending inventory	$23,210.00
d. Operating expenses	$13,980.00
e. Net income	$19,300.00

Working

Net sales			$136,500.00
Cost of goods sold:
Beginning inventory		$ 26,690.00
Net purchases	$82,190.00
Transportation-in	$ 7,150.00
Cost of goods purchased		$ 89,340.00
Cost of goods available for sale		$116,030.00
Ending inventory		$ 23,210.00
Cost of goods sold			$ 92,820.00
Gross profit			$ 43,680.00
Operating expenses			$ 13,980.00
Income before tax			$ 29,700.00
Income tax expense			$ 10,400.00
Net income			$ 19,300.00