Question

Various items from the Perril Company's Income statement for the year ending December 31, 2005 are listed below: Interest expense = 76 Depreciation = 56 Taxes = 33 Dividends paid = 15 Beginning inventory = 130 Gross sales = 804 Materials purchases = 590 Operating expenses (excluding depreciation) = 129 Returns and allowances = 48 Ending inventory = 234 Compute Net income (Record your answer without a dollar sign, without commas, without spaces and if your answer is negative, put a minus sign (i.e., -) before your answer with no spaces between the minus sign and the number). Your Answer:

Answer 1

Compute the net income of the company, using MS-excel as shown below:

C 804 В Net Income 4 Particulars / Amount Gross sales Return and allowance -48 Net sales =SUM(C5:06) 8 Expenses: 9 Opening Inventory 130 10 Purchases 590 | 11 Closing inventory 1-234 12 Interest expenses Depreciation 56 14 Taxes 33 15 Operating expenses 129 Total expenses =SUM(C9:C15) . 76 16 17 Net income =C7-C16

The result of the above table is as follows:

В C Net Income 4 Particulars Amount Gross sales $ 804 Return and allowance ($ 48) Net sales $ 756 8 Expenses: Opening Inventory $ 130 10 Purchases $ 590 | 11 Closing inventory 12 Interest expenses $ 76 Depreciation $ 56 Taxes $ 33 15 Operating expenses $ 129 16 Total expenses $ 780 9 13 14 17 18 Net income (S 24)

Hence, the net income of the company is -24.