Fill in the blanks in the following separate income statements a through e. Identify any negative
amount by putting it in parentheses.
a b c d e
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000 $42,500 $36,000 $ ? $23,600
Cost of goods sold
Merchandise inventory (beginning) . . . . . . . . . . 6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases . . . . . . . 36,000 ? ? 32,000 5,600
Merchandise inventory (ending) . . . . . . . . . . . . ? (2,700) (9,000) (6,600) ?
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . 34,050 15,900 ? ? 5,600
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? 3,750 45,600 ?
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . $ ? $15,950 $ (8,400) $43,000 $ ?
a. $25,950
b. 25,000
c. 24,000
d. 28,400
e. 17,600
To fill in the blanks in the income statements, follow these steps:
a) Sales: The sales amount is given as $60,000.
b) Cost of goods sold:
- Beginning merchandise inventory: $6,000
- Total cost of merchandise purchases: $36,000
- Ending merchandise inventory: The ending merchandise inventory is not given, so we leave it blank.
To find the cost of goods sold, use the formula:
Cost of goods sold = Beginning merchandise inventory + Total cost of merchandise purchases - Ending merchandise inventory.
Using the given values:
Cost of goods sold = $6,000 + $36,000 - (ending merchandise inventory)
c) Gross profit:
To find the gross profit, use the formula:
Gross profit = Sales - Cost of goods sold
Using the given values:
Gross profit = $60,000 - (cost of goods sold)
d) Expenses: The expenses are given as $9,000.
e) Net income (loss):
To find the net income (loss), use the formula:
Net income (loss) = Gross profit - Expenses
Using the given values:
Net income (loss) = (gross profit) - $9,000
Now let's fill in the blanks:
a) Sales: $60,000
b) Cost of goods sold:
- Beginning merchandise inventory: $6,000
- Total cost of merchandise purchases: $36,000
- Ending merchandise inventory: Unknown (put a question mark)
c) Gross profit: Unknown (put a question mark)
d) Expenses: $9,000
e) Net income (loss): Unknown (put a question mark)
To fill in the remaining blanks, we need additional information about the ending merchandise inventory and gross profit.
a b c d e
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000 $42,500 $36,000 $ ? $23,600
Cost of goods sold
Merchandise inventory (beginning) . . . . . . . . . . 6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases . . . . . . . 36,000 ? ? 32,000 5,600
Merchandise inventory (ending) . . . . . . . . . . . . ? (2,700) (9,000) (6,600) ?
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . 34,050 15,900 ? ? 5,600
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? 3,750 45,600 ?
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . $20,950 $15,950 $ (8,400) $43,000 $12,000
In the above income statements:
- In statement a, the Gross profit is (Sales - Cost of goods sold) = (60,000 - 34,050) = $25,950.
- In statement b, the Total cost of merchandise purchases is unknown (?).
- In statement c, the Gross profit is (Sales - Cost of goods sold) = (36,000 - 15,900) = $20,100.
- In statement d, the Cost of goods sold is unknown (?).
- In statement e, the Gross profit is unknown (?).
To fill in the missing values:
- In statement b, the Total cost of merchandise purchases is (Cost of goods sold + Merchandise inventory (beginning) - Merchandise inventory (ending)) = (15,900 + 17,050 - 2,700) = $30,250.
- In statement d, the Cost of goods sold is (Total cost of merchandise purchases + Merchandise inventory (beginning) - Merchandise inventory (ending)) = (32,000 + 7,000 - 6,600) = $32,400.
- In statement e, the Gross profit is (Sales - Cost of goods sold) = (23,600 - 5,600) = $18,000.