215
Tools 4U
Income Statement
For the Year Ended December 31, 2016
Sales Revenue
$200,000
Less:
Sales Returns and Allowances
$4,000
Sales Discounts
2,000 (6,000)
Net Sales
194,000
Cost of Goods Sold
Inventory, January 1, 2016
20,000
Purchases
$140,000
Less: Purchase Returns and Allowances $9,000
Purchase Discounts
13,000 (22,000)
Net Purchases
118,000
Freight-In
6,000 124,000
Cost of Goods Available for Sale
144,000
Inventory, December 31, 2016
44,000
Cost of Goods Sold
100,000
Gross Profit
94,000
Operating Expenses
Depreciation Expense
5,000
Rent Expense
10,000
Salaries Expense
40,000
Supplies Expense
7,000
Utilities Expense
6,000
Total Operating Expenses
68,000
Operating Income
26,000
Other Revenue and Expenses
Interest Revenue
8,000
Interest Expense
(4,000)
4,000
Net Income
$30,000
____________
figure 7A.17
1. Calculate Net
Sales
2. Calculate Cost
of Goods Sold
and Gross
Profit
3. Calculate
Operating
Income
4. Calculate non-
operating
activities and
Net Income
Inventory: Merchandising Transactions
Chapter 7 Appendix
