Question

Thomas Company had the following information related to September 2020:

1) Depreciation on the store equipment was $60,000 for the month.

2) Sales of merchandise inventory for the month of September were $1,800,000, of which $1,200,000 was paid in cash and the remaining amount sold on credit. The cost of the merchandise sold was $1,080,000.

3) The next payroll will be $144,000 and will be paid on October 12. This payroll will cover wages earned during the last week of September and the first week of October.

4) The utility bill of $72,000 for the month of September was both received and paid in early October.

5) Thomas sold a company car for a gain of $12,000 on September 22.

6) On September 3, Thomas paid $6,000 for August’s telephone bill.

7) On October 1, Thomas received the September telephone bill, which totaled $12,000. The bill will be paid in mid-October.

8) Wages paid in cash to employees during the month totaled $288,000. This amount included $60,000 paid for work done in the month of August. This amount is separate from item (3) above.

9) The company had a $120,000 note payable related to cash that was borrowed on March 1, 2010; both the interest and principal related to the note are to be paid on February 29, 2021. The interest rate on the note is 6%.

10) On September 1, Thomas paid a total of $72,000 cash for three months’ rent covering the period of September through November.

11) The company recorded its income tax liability for the month of September. Assume Thomas Company’s tax rate is 30%

Based on the information above, answer the following questions. Round all answers to the nearest dollar.

What was revenue for the month?

What was wages expense for the month?

How much was interest expense for the month?

What was operating income for the month?

What was net income for the month?

Answer 1