Question

Shamrock, Inc. operates a retail operation that purchases and sells snowmobiles, among other outdoor products. The company purchases all inventory on credit and uses a periodic inventory system. The Accounts Payable account is used for recording inventory purchases only; all other current liabilities are accrued in separate accounts. You are provided with the following selected information for the fiscal years 2020 through 2023, inclusive.

(a)

Calculate the missing amounts.

		2020		2021			2022			2023
Income Statement Data
Sales revenue				$103,000			$enter a dollar amount	(e)		$76,000
Cost of goods sold				enter a dollar amount	(a)		25,920			25,840
Gross profit				74,160			55,080			enter a dollar amount	(i)
Operating expenses				67,980			enter a dollar amount	(f)		48,640
Net income				$enter a total net income	(b)		$ 3,240			$enter a total net income	(j)
Balance Sheet Data
Inventory		$13,800		$enter a dollar amount	(c)		$15,900			$enter a dollar amount	(k)
Accounts payable		6,200		6,900			5,000			enter a dollar amount	(l)
Additional Information
Purchases of inventory on account				27,890			$enter a dollar amount	(g)		$26,050
Cash payments to suppliers				enter a dollar amount	(d)		enter a dollar amount	(h)		26,550

b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

a)	Costof Goods sold = Sales Revenue - Gross Profit
		= $ 103,000 - $ 74,160
		= $ 28,840
b)	Net Income = Gross Profit - Operating Expeses
		= $ 74,160 - $ 67,980
		= $ 6,180
c)	Inventory = Opening Inventory + Purchases - Cost of Goods sold
		= $ 13,800 + $ 27,890 - $ 28,840
		= $ 12,852
d)	Cash payments to Suppliers = Opening Accounts payable + Purchases - Ending Accounts payable
		= $ 6,200 + $ 27,890 - $ 6,900
		= $ 27,190
e)	Sales Revenue = Cost of goods Sold + Gross Profit
		= $ 25,920 + $ 55,080
		= $ 81,000
f)	Operating expenses = Gross Profit - Net Income
		= $ 55,080 - $ 3,240
		= $ 51,840
g)	Purchases of Inventory on account = Ending Inventory + Cost of Goods Sold - Opening Inventory
		= $ 15,900 + $ 25,920 - $ 12,852
		= 28,968
h)	Cash payments to Suppliers = Opening Accounts payable + Purchases - Ending Accounts payable
		= $ 6,900 + $ 28,968 - $ 5,000
		= $ 30,868
i)	Gross Profit = sales - cost of goods sold
		= $ 76,000 - $ 25,840
		= $ 50,160
j)	Net income = Gross Profit - Operating expenses
		= $ 50,160 - $ 48,640
		= $ 1,520
k)	Inventory = Opening Inventory + Purchases - Cost of Goods sold
		= 15,900 + $ 26,050 - $ 25,840
		= $ 16,110
l)	Accounts Payable = Opening Accounts Payable + Purchases - cash Paid
		= 5,000 + $ 26,050 - $ 26,550
		= $ 4,500