Question

Advertising 101,450 Beginning of year inventory 147,860 Depreciation 85,200 End of year inventory 149,620 General and administrative expenses 86,250 Gross sales 2,875,610 Interest expense 12,700 Lease payments 33,650 Management salaries 347,900 Purchases 1,976,840 Research and development 10,560 Returns and allowances 84,000 Taxes 42,510.

1. What was gross profit from income statement for the year ending December 31, 2018?

2. What was operating profit (i.e., EBIT) from Delicious Dishes income statement for the year ending December 31, 2018?

3. What was net income from Delicious Dishes income statement for the year ending December 31, 2018?

Answer 1

1. Gross profit from the income statement for the year ending December 31, 2018 is:

Particulars	Amount ($)
Gross sales	2,875,610
Less: Cost of goods sold
Beginning of year inventory	147,860
Add: Purchases	1,976,840
Less: End of year inventory	-149,620
Cost of goods sold	1,975,080
Gross profit	900,530

2. Operating profit (i.e., EBIT) from Delicious Dishes income statement for the year ending December 31, 2018 is:

Particulars	Amount ($)
Gross sales	2,875,610
Cost of goods sold	1,975,080
Gross profit	900,530
Less: Expenses:
Advertising	101,450
Depreciation	85,200
Lease payments	33,650
General and administrative expenses	86,250
Management salaries	347,900
Research and development	10,560
Returns and allowances	84,000
Total expenses	749,010
Operating Profit	151,520

3. Net income from Delicious Dishes income statement for the year ending December 31, 2018 is:

Particulars	Amount ($)
Gross sales	2,875,610
Cost of goods sold	1,975,080
Gross profit	900,530
Total expenses	749,010
Operating Profit	151,520
Less:
Interest expense	12,700
Taxes	42,510
Net Income	96,310