Financial information is presented below for three different companies Determine the missing...

Question:

Financial information is presented below for three different companies.

Determine the missing amounts.

Allen Cosmetics Bast Grocer Corr Wholesalers
Sales revenue $94,100 $ e $126,000
Sales returns and allowances a 5,110 13,300
Net sales 86,800 97,600 i
Cost of goods sold 56,400 f j
Gross profit b 39,200 25,400
Operating expenses 16,700 g 18,600
Income from operations c h k
Other expenses and losses 3,300 7,600 l
Net income d 11,200 4,800

Income Statement:

The income statement of a firm may be prepared by using absorption costing approach or variable costing approach. Under the absorption costing, various intermediate parameters such as gross profit, operating income and pretax income are determined before the net income while under the variable method, contribution margin and net operating income are determined before the net income.

Answer and Explanation:

Allen Cosmetics

The value of sales returns and allowances (a) is given by:

  • = Sales revenue - net sales
  • = $94,100 - $86,800
  • = $7,300

The gross profit (b) is given by:

  • = Net sales - cost of goods sold
  • = $86,800 - $56,400
  • = $30,400

The income from operations (c) is given by:

  • = Gross profit - operating expenses
  • = $30,400 - $16,700
  • = $13,700

The net income (d) is given by:

  • = Income from operations - other expenses and losses
  • = $13,700 - $3,300
  • = $10,400

Bast Grocer

The sales revenue (e) is given by:

  • = Net sales + sales returns and allowances
  • = $97,600 + $5,110
  • = $102,710

The cost of goods sold (f) is given by:

  • = Net sales - gross profit
  • = $97,600 - $39,200
  • = $58,400

The income from operations (h) is given by:

  • = Net income + other expenses and losses
  • = $11,200 + $7,600
  • = $18,800

The operating expenses (g) is given by:

  • = Gross profit - income from operations
  • = $39,200 - $18,800
  • = $20,400

Corr Wholesalers

The net sales (i) is given by:

  • = Sales revenue - sales returns and allowances
  • = $126,000 - $13,300
  • = $112,700

The cost of goods sold (j) is given by:

  • = Net sales - gross profit
  • = $112,700 - $25,400
  • = $87,300

The income from operations (k) is given by:

  • = Gross profit - operating expenses
  • = $25,400 - $18,600
  • = $6,800

The other expenses and losses (l) is given by:

  • = Income from operations - net income
  • = $6,800 - $4,800
  • = $2,000

Allen Cosmetics Bast Grocer Corr Wholesalers
Sales revenue $94,100 $102,710 $126,000
Sales returns and allowances $7,300 5,110 13,300
Net sales 86,800 97,600 $112,700
Cost of goods sold 56,400 $58,400 $87,300
Gross profit $30,400 39,200 25,400
Operating expenses 16,700 $20,400 18,600
Income from operations $13,700 $18,800 $6,800
Other expenses and losses 3,300 7,600 $2,000
Net income $10,400 11,200 4,800

Learn more about this topic:

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What Is an Income Statement? - Purpose, Components & Format

from Accounting 101: Financial Accounting

Chapter 2 / Lesson 2
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