Question

In: Accounting

As the accountant of Fun Slide Co., you have been asked to calculate Net sales Cost...

As the accountant of Fun Slide Co., you have been asked to calculate

  1. Net sales
  2. Cost of merchandise sold
  3. Gross profit
  4. Net income

from the following:

  • gross sales, $45,000
  • sales returns, $2000
  • beginning inventory, $5,000
  • net purchases, $8,000
  • ending inventory, $2,000
  • operating expenses, $9,200

Solutions

Expert Solution

1. CALCULATED NET SALES :-

NET SALES = GROSS SALES - SALES RETURN

= $45,000 - $2,000

= $ 43,000

2. COST OF MARCHANDISE SOLD :-

COST OF MARCHANDISE SOLD = BEGINNING INVENTORY + NET PURCHASE - ENDING INVENTORY

= $ 5000+ $8,000- $2,000

= $ 11,000

3. GROSS PROFIT :-

GROSS PROFIT = NET SALES - COST OF MARCHANDISE SOLD

= $43,000 - $11,000

= $ 32,000

4. NET INCOME :-

NET INCOME = GROSS PROFIT - OPERATING EXPENSES

= $ 32,000-$ 9,200

= $ 22,800

NET SALES $ 43,000
COST OF MARCHANDISE SOLD $ 11,000
GROSS PROFIT $ 32,000
NET INCOME $ 22,800

ekkarill92 answered 2 years ago
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