prepare the income statement for red company which uses the periodic inventory syste 643748
Computing periodic inventory amounts Consider the data of the following companies:
|
|
|
Beginning |
Net |
Ending |
Cost of |
Gross |
|
Company |
Net sales |
inventory |
purchases |
inventory |
goods sold |
profit |
|
Red |
$101,000 |
$22,000 |
$65,000 |
$17,000 |
(a) |
$31,000 |
|
Yellow |
(b) |
25,000 |
95,000 |
(c) |
96,000 |
40,000 |
|
Orange |
93,000 |
(d) |
52,000 |
22,000 |
62,000 |
(e) |
|
Green |
86,000 |
12,000 |
(f) |
5,000 |
(g) |
49,000 |
Requirements
1. Supply the missing amounts in the preceeding table.
2. Prepare the income statement for Red Company, which uses the periodic inventory system. Include a complete heading and show the full computation of cost of goods sold. Red’s operating expenses for the year were $11,000.