Answer:
e. Purchases & freight= 60,000
f. Cost of goods sold= 88,800
d. Sales= 202,800
g.Operating income= 28,000
Explanation:
Calculation for the missing amounts for Flynt Corp.
e. Computaion for Purchases & freight-in
Using this formula
Purchases & freight-in= Cost of Goods Available for Sale - Beginning Merchandise Inventory
Let plug in the formula
Purchases & freight= 91,000 - 31,000
Purchases & freight= $ 60,000
f. Computation for Cost of goods sold
Using this formula
Cost of goods sold = Cost of Goods Available for Sale - Ending Merchandise Inventory
Let plug in the formula
Cost of goods sold= 91,000 - 2,200
Cost of goods sold= 88,800
d. Computation for Sales
Using this formula
Sales = Gross profit + Cost of goods sold
Let plug in the formula
Sales= 114 000 + 88,800
Sales= 202,800
g. Computation for Operating income
Using this formula
Operating income = Gross profit - Selling and Administrative Expenses
Let plug in the formula
Operating income= 114,000 - 86,000
Operating income= 28,000
Preparation for the Income statement for Flynt Corp.
Flynt INCOME STATEMENT
Sales 202,800 (i)
Cost of good sold :
Beginning Merchandise Inventory 31,000
Purchases and Freight In 60,000
Total Cost of goods available for sale 91,000
(60,000+31,000)
Less Ending Merchandise Inventory 2,200
Cost of goods sold 88,800 (ii)
(91,000-2,200)
Gross profit 114,000
(202,800 - 88,800)
Less Selling & Administrative expenses 86,000
Operating income 28,000
