Revolve Company's income statement information for 2016 and 2017 (a sole proprietorship) is as...

Question:

Revolve Company's income statement information for 2016 and 2017 (a sole proprietorship) is as follows:

Compute the missing amounts labeled (a) through (f).

2016 2017
Cost of goods sold $ (a) $59,300
Interest expense 600 0
Selling expenses (b) 10,800
Operating income 21,800 (d)
Sales (net) 96,000 (e)
General expenses 7,900 (f)
Net income (c) 21,600
Interest revenue 0 600
Gross profit 39,000 40,200

Income Statement

Income Statement is one of the types of financial statements. It is also commonly known as statement of financial performance because it summarizes the profitability of a company by indicating the revenues, expenses and income.

Answer and Explanation:

The missing amounts are computed as follows:

(a)

Sales (net) 96,000
Less: Gross profit 39,000
Cost of goods sold 57,000

(b)

Gross profit 39,000
Less: General expenses 7,900
Less: Operating income 21,800
Selling expenses 9,300

(c)

Operating income 21,800
Less: Interest expense 600
Net income 21,200

(d)

Net income 21,600
Less: Interest revenue 600
Operating income 21,000

(e)

Cost of goods sold 59,300
Add: Gross profit 40,200
Sales (net) 99,500

(f)

Gross profit 40,200
Less: Selling expenses 10,800
Less: Operating income 21,000
General expenses 8,400

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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