Question

need explenation!

QUESTION 1 Cost of goods purchased, cost of goods sold, and income statement. The following data are for Carolina Retail Outlet Stores. The account balances are for 2015. • Marketing and advertising costs, $22000, • Merchandise inventory, January, 1, 2015, $29500, • Shipping of merchandise to customers, $1230, • Building depreciation, $1540, • Purchases, $135300, • General administrative costs, $14000, • Merchandise inventory, December 31, 2015, $24000, • Merchandise freight in, $4620, • Purchase returns and allowances, $4510, • Purchase discounts, $8610, • Revenues, $248000. Required 1. Compute both the cost of goods purchased, and the cost of goods sold. 2. Prepare the income statement for 2015.

Answer 1

1) Computation of goods purchased and cost of goods sold Cost of goods purchased = Purchases + Merchandise freight in - purchase returns and allowances - purchase discounts =135300+4620-4510-8610 $ 126,800 Cost of goods sold = Beginning merchandise inventory + Cost of goods purchased - Ending merchandise inventory =29500+126800-24000 S 132,300 2) Carolina Retail Outlet stores Income Statement Particulars Amount Amount Revenue $ 248,000 less: Cost of Goods sold $ (132,300) Gross Profit $115,700 less: Operating expenses Marketing and advertising costs $ 22,000 Shipping of merchandise to customers $ 1,230 Building depreciation $ 1,540 General administrative costs $ 14,000$ 38,770 Net Income S 76,930 **As per HomeworkLib guidelines if any one posted multiple questions, we have to answer first question or particular question Specified by them, so as per guidelines i answered first question. Thank you