The company purchased 550,000 merchandise for account and 220,000 for cash. transportation costs totaled 30,000 FOB shipping point. the company returned 10,000 amount of merchandise and availed 45,000 discounts. Since this is the start of the operations, no inventories were computed in the beginning while half of the amount of the net purchases is considered as the ending inventories. 1. compute for the net purchases of the company. 2. how much is the cost of goods sold? 3. assuming that the amount of sales is 400,000 with sales discount of 1,000 how much is the gross profit? 4. assuming that the operating expenses totaled 5,000 how much is the net income?
The company purchased 550,000 merchandise for account and 220,000 for cash. transportation costs totaled 30,000 FOB shipping point. the company returned 10,000 amount of merchandise and availed 45,000 discounts. Since this is the start of the operations, no inventories were computed in the beginning while half of the amount of the net purchases is considered as the ending inventories. 1. compute for the net purchases of the company. 2. how much is the cost of goods sold? 3. assuming that the amount of sales is 400,000 with sales discount of 1,000 how much is the gross profit? 4. assuming that the operating expenses totaled 5,000 how much is the net income?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The company purchased 550,000 merchandise for account and 220,000 for cash. transportation costs totaled 30,000 FOB shipping point. the company returned 10,000 amount of merchandise and availed 45,000 discounts. Since this is the start of the operations, no inventories were computed in the beginning while half of the amount of the net purchases is considered as the ending inventories.
1. compute for the net purchases of the company.
2. how much is the cost of goods sold?
3. assuming that the amount of sales is 400,000 with sales discount of 1,000 how much is the gross profit?
4. assuming that the operating expenses totaled 5,000 how much is the net income?
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