Answer:
Sales revenue 1,381,550
Sales discounts (46,550)
Sales returns and allowances (151,550)
net sales 1,183,450
Cost of goods sold <u> (622,550) </u>
gross profit 560,900
Admin and general expenses (98,550)
Selling expenses (195,550)
Operating Income: 266.800
Non-operating income:
Interest revenue 87,550
Interest expense (61,550)
Loss from earthquake
damage (151,550)
non-operating loss (125,550)
Income before taxes 141.250
income tax expense (34%) (48,025)
Net income 93,225
Explanation:
First, we calcualte net sales,
then the gross profit.
Then, the interest and earthquake will be disclosure separately as they are not operational result. Do not arise from the normal business operations.
Finally, the net income is determined after reducing the income tax expense
