Question

Consider the following partially completed income statements for merchandising companies and compute the missing amounts: (Click the icon to view the Income Statements.) Data Table Flynt Corp. Corrigan, Inc. 100,000 L $ L $ 28,000 Flynt Corp. 100,000 Corrigan, Inc. $ 51,000 $ Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory Purchases and Freight In Cost of Goods Available for Sale Ending Merchandise Inventory Cost of Goods Sold Gross Profit Selling and Administrative Expenses 93,000 (1,800) Net Sales Revenue Cost of Goods Sold: Beginning Merchandise Inventory (1,800) 28,000 (a) 51,000 60,000 Purchases and Freight In Cost of Goods Available for Sale 40,000 115,000 84,000 (b) (1,800) 93,000 (1,800) S 11,000 Operating Income Ending Merchandise Inventory Cost of Goods Sold Gross Profit Selling and Administrative Expenses 60,000 40,000 115,000 84,000 Operating Income 11,000 (9) $ Print Done

Answer 1

Flynt corp.

(b) Cost of goods sold = cost of goods available for sale - Ending merchandise inventory

60,000 = cost of goods available for sale - 1,800

cost of goods available for sale = $61,800

(a) cost of goods available for sale = Beginning merchandise inventory + Purchase and freight in

61,800 = Beginning merchandise inventory + 51,000

Beginning merchandise inventory = $10,800

(c) Operating income = Gross profit - Selling and administrative expenses

11,000 = 40,000 - Selling and administrative expenses

Selling and administrative expenses = $29,000

Corrign Inc.

(e) cost of goods available for sale = Beginning merchandise inventory + Purchase and freight in

93,000 = 28,000 + Purchase

Purchase= $65,000

(f) Cost of goods sold = cost of goods available for sale - Ending merchandise inventory

Cost of goods sold = 93,000- 1,800

Cost of goods sold = $91,200

(d) Net sales revenue = Cost of goods sold + Gross profit

= 91,200+115,000

= $206,200

(g)Operating income = Gross profit - Selling and administrative expenses

= 115000 - 84,000

= $31,000

	Flynt corp.	Corrign, Inc.
Net sales revenue	100,000	206,200
Cost of goods sold:
Beginning merchandise inventory	10,800	28,000
Purchase and freight in	51,000	65,000
Cost of goods available for sale	61,800	93,000
Ending merchandise inventory	(1,800)	(1,800)
Cost of goods sold	60,000	91,200
Gross profit	40,000	115,000
Selling and administrative expenses	29,000	84,000
a	$        11,000	$        31,000

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