1) Cost of Goods Sold reduces Gross Sales to arrive at Total Income.
2) Net Income would increase by $5,000.
3) Net Income would increase by $5,000.
Income | ||
|
|
|
Gross Sales
|
$323,789.40
|
|
Less Returns and Allowances |
$10,000.00
|
|
Net Sales |
|
$313,789.40
|
|
|
|
Cost of Goods |
|
|
Merchandise |
|
|
inventory, January 1 |
$160,000.00
|
|
Purchases |
$90,000.00
|
|
Freight Charges |
$2,000.00
|
|
Total Merchandise Handled |
$252,000.00
|
|
|
|
|
Less Inventory, December 31 |
-$100,000.00
|
|
Cost of Goods Sold |
|
$152,000.00
|
Gross Profit |
|
$161,789.40
|
|
|
|
Interest Income |
$2,500.00
|
|
Total Income |
|
$164,289.40
|
|
|
|
Expenses |
|
|
Salaries |
$50,360.40
|
|
Utilities |
$5,800.00
|
|
Rent |
$23,000.00
|
|
Office Supplies |
$2,250.00
|
|
Insurance |
$3,900.00
|
|
Advertising |
$8,650.00
|
|
Telephone |
$2,700.00
|
|
Travel and Entertainment |
S$2,550.00
|
|
Dues and Subscriptions |
$1,100.00
|
|
Interest Paid |
$2,100.00
|
|
Repairs and Maintenance |
$1,250.00
|
|
Taxes and Licenses |
$35,589.00
|
|
Total Expenses |
|
$139,289.40
|
|
|
|
Net Income |
|
$25,000.00
|
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