OPENING CASH FLOW 42000 ENDING CASH AND FLOW STATEMENT This

OPENING CASH FLOW 42000 ENDING CASH AND FLOW STATEMENT This question has not been graded. The correct answer is not displayed for Written Response type questions 60000 Question 26 Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings. Increase Decrease) Increase (Decrease) . $29,000 Accounts payable$34,000 (20,000) Cash Accounts receivable (net) (18,000) Bonds payable Inventory Plant assets (net) The only entries in Retained Earnings were for net income and a dividend declaration of $17 52,000 Common stock 57,000 Paid-in capital 16,000 ,000 1. Compute the net income for the current year. 2. Explain what else can affect the Retained Earnings account. This question has not been graded. The correct answer is not displayed for Written Response type questions Attempt Overall Grade (highest att Done O Type here to search

Solution

21: Company A

We know that cost of goods sold = opening inventory+purchase-ending inventory

Thus cost of goods sold = 52600+205300-52200 = $205700.

Now sales – cost of goods sold = gross profit. Thus sales – 205700 = 75300. Or sales = $281,000

Operating expenses = gross profit – income before tax = 75300-6000 = 69300

Thus (a) = 281,000. (b) = 205,700 and (c) = 69,300

Company B:

Gross profit = sales – cost of goods sold. Thus 128,000 = 343,400-cost of goods sold. Or cost of goods sold = 343400-128000 = $215,400.

Now cost of goods sold = opening inventory+purchase-ending inventory

Or 215400 = opening inventory+255600-108000

Or opening inventory = 215400+108000-255600 = 67800/

Income before taxes = 128000-50000 = 78000

Thus (d) = 67,800, (e) = 215,400 and (f) = 78,000

Company C:

Net purchases = cost of goods sold-opening stock+closing stock

= 437,000-90,000+63000

= 410,000

Gross profit = 540000-437000 = 103,000

Income before taxes = 103,000-48000 = 55,000

Thus (g) = 410,000, (h) = 103,000 and (i) = 55,000