Question

Supply the missing dollar amounts for the 2017statement of earnings of Kwan Company for each of the following independent cases:

	Case A	Case B	Case C
Sales revenue	$ 8,000	$ 6,000
Sales returns and allowance	150		275
Net sales revenue			5,920
Beginning inventory	11,000	6,500	4,000
Purchases	5,000		9,420
Transportation-in		120	170
Purchase returns	350	600
Cost of goods available for sale		14,790	13,370
Ending inventory	10,000	10,740
Cost of sales			5,400
Gross profit		1,450
Expense (operating)	1,300		520
Pretax earnings (loss)	$ 800	$ 500	$ 0

Answer 1

Income Statement
	Case A	Case B	Case C
Sales revenue	$   8,000	$   6,000	$   6,195
Sales returns and allowance	$      150	$      500	$     275
Net sales revenue	$   7,850	$   5,500	$   5,920
Beginning inventory	$ 11,000	$   6,500	$   4,000
Purchases	$   5,000	$   8,770	$   9,420
Transportation-in	$      100	$      120	$     170
Purchase returns	$      350	$      600	$     220
Cost of goods available for sale	$ 15,750	$ 14,790	$ 13,370
Ending inventory	$ 10,000	$ 10,740	$   7,970
Cost of sales	$   5,750	$   4,050	$   5,400
Gross profit	$   2,100	$   1,450	$     520
Expense (operating)	$   1,300	$      950	$     520
Pretax earnings (loss)	$      800	$      500	$        0

Working for calculation	Case A	Case B	Case C
Sales revenue	$                       8,000	$              6,000	(5920+275)
Sales returns and allowance	$                          150		$           275
Net sales revenue	(8000-150)		$        5,920
Beginning inventory	$                      11,000	$              6,500	$        4,000
Purchases	$                       5,000	(14790-6500-120+600)	$        9,420
Transportation-in	do this after calculating sales (calculate profit with provided figures and then deduct 800 to get transport expense)	$                 120	$           170
Purchase returns	$                          350	$                 600	(13370-4000-9420-170)
Cost of goods available for sale	calculate after transport in calculation	$            14,790	$      13,370
Ending inventory	$                      10,000	$            10,740	(13370-5400)
Cost of sales	use general rule	(6500+Purchases+120-600-10740)	$        5,400
Gross profit	use general rule	$              1,450	(5920-5400)
Expense (operating)	$                       1,300	(1450-500)	$           520
Pretax earnings (loss)	$                          800	$                 500	$             -