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Objectives To calculate cost of goods sold Directionsi From the following data, calculate Mason Company's cost of gods wod for 20x1 Purchases during the period Freight in s 47,610 114,750 3,375 14,875 3,145 38,910 retums and allowanoes 10- Objectives To calculate income statement amounts Directions: From the following data, calculate (a) net sales, (b) cost of goods sold (c) gross profit, and (d) net income or net loss. tem Sales Sales returns and allowances Sales discounts Amount $437,600 21,600 9,520 37,510 307,300 43,710 82,450 Beginning merchandise inventory Ending merchandise inventory Operating expenses Exercise 10-3 Objective: To calculate missing financial stat Directions: Calculate the missing items in the following table Goods Available for Ending Beginning Net Cost of Net Sales Inventory Purchases Sale $118,900 Inventory Goods Sold Gross Profi $ 72,100 $98,600 $19,000 65,200 118,000 $38,000 $73,400 145,000 31,000 145,000 81,230 Exercise 10-4 Objective: To prepare financial statements and journalize closing entries Directions: The financial statement columns of the December 31, 20X4, work sheet for McGaw Co statement of owner's equity, and (3) a balance sheet, and (4) journalize closing entries. mpany are on page 486. Prepare (1) an income statement, (2) a

Answer 1

Answer to Exercise 10-1

Cost of Goods Sold = Beginning Merchandise Inventory + Net Purchases + Freight In – Ending Merchandise Inventory
Net Purchases = Purchases – Purchases Returns and Allowances – Purchase Discounts
Net Purchases = $114,750 - $14,875 - $3,145
Net Purchases = $96,730

Cost of Goods Sold = $47,610 + $96,730 + $3,375 - $38,910
Cost of Goods Sold = $108,805

Answer to Exercise 10-2

Net Sales = Sales – Sales Returns and Allowances – Sales Discount
Net Sales = $437,600 - $21,600 - $9,520
Net Sales = $406,480

Cost of Goods Sold = Beginning Merchandise Inventory + Net Purchases – Ending Merchandise Inventory
Cost of Goods Sold = $37,510 + $307,300 - $43,710
Cost of Goods Sold = $301,100

Gross Profit = Net Sales – Cost of Goods Sold
Gross Profit = $406,480 - $301,100
Gross Profit = $105,380

Net Income or Net Loss = Gross Profit – Operating Expenses
Net Income or Net Loss = $105,380 - $82,450
Net Income = $22,930