Book 2 - Chapter 21

Reinforcement Problem

21-1.

Kutztown Company Income Statement For the Year Ended December 31, 2008
Sales revenueh				$ 294,000
Less: Sales returns and allowances Sales discount Net sales revenue			$ 2,550 3,900	6,450 287,550
Cost of goods sold Inventory, January 1 Purchases Less: Purchase returns and allowances Purchase discounts Net purchasess Add: Freight-in Cost of goods purchased Cost of goods available for sale Inventory, December 31 Cost of goods sold Gross profit	$ 700 3,100	$109,900 3,800 106,100 920	15,350 107,020 122,370 9,500	112,870 174,680
Operating expenses Selling expenses Salaries and wages expense Advertising expense Freight-out Total selling expenses		55,500 3,500 370	59,370
Administrative expenses Rent expense Depreciation expenses Insurance expenses Utilities expense Total administrative expenses Total operating expenses		26,000 7,500 5,000 4,850	43,350	102,720
Operating income				71,960
Other income Interest revenue			300
Other expense Interest expense			1,700	14,00
Net income				$ 70,560

Learning Goal 21, continued

SOLUTIONS

Section III · Merchandising Operations

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