Question

Presented below are the components in Gates Company’s income statement. Determine the missing amounts. Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income (a) $82,400 $ $30,100 $ $20,900 (b) $110,600 $77,000 $ $ $23,600 (c) $ $75,100 $87,200 $47,700

Answer 1

Answer:

(a) $52,300; $9,200

(b) $33,600; $10,000

(c) $162,300; $39,500

Explanation:

(a) Sales Revenue = $82,400

Cost of Goods Sold = ?

Gross Profit = $30,100

Operating Expenses = ?

Net Income = $20,900

Gross profit = Sales revenue - Cost of goods sold

$30,100 = $82,400 - Cost of goods sold

Cost of goods sold = $82,400 - $30,100

                                = $52,300

Net income = Gross margin - Operating expenses

Operating expenses = Gross margin - Net income

                                  = $30,100 - $20,900

                                  = $9,200

(b) Sales Revenue = $110,600

Cost of Goods Sold = $77,000

Gross Profit = ?

Operating Expenses = ?

Net Income = $23,600

Gross profit = Sales revenue - Cost of goods sold

                    = $110,600 - $77,000

                    = $33,600

Operating expenses = Gross margin - Net income

                                  = $33,600 - $23,600

                                  = $10,000

(c) Sales Revenue = ?

Cost of Goods Sold = $75,100

Gross Profit = $87,200

Operating Expenses = $47,700

Net Income = ?

Gross profit = Sales revenue - Cost of goods sold

Sales revenue = Gross profit + Cost of goods sold

                        = $87,200 + $75,100

                        = $162,300

Net income = Gross margin - Operating expenses

                   = $87,200 - $47,700

                   = $39,500