Question 1: Presented below are the components in Clearwater Company’s income statement. Determine the missing amounts.
Sales Cost of Gross Operating Net
Goods Profit Expenses Income
(a) $75,000 ? $28,600 ? $10,800
(b) $108,000 $70,000 ? ? $29,500
(c) ? $71,900 $99,600 $39,500 ?
Question 2: Piccola Company provides the following information for the month ended October 31, 2006: Sales on credit $280,000, cash sales $100,000 sales discounts $13,000, sales returns and allowances $21,000. Prepare the sales revenues section of the income statement based on this information.
Question 3: Assume that E. Guard Company uses a periodic inventory system and has these account balances: Purchases $400,000; Purchase Returns and Allowances $11,000; Purchase Discounts $8,000; and Freight-in $16,000. Determine net purchases and cost of goods purchased.