Please answer following questions and show how answers were

Please answer following questions and show how answers were found.

Use the in n below to answer the following questions. Cash Accounts receivable Depreciation expense10,000 Sales discounts Sales Sales returns and allowances Dividends Retained earnings, Jan. 1 Purchases returns and allowances Inventory, Jan. I Inventory, Dec. 31 100 4,000 8,000 200 5,000 3,000 6,000 20,000 Building Selling expense Interest expense Accounts payable Wages expense Unearned revenue 400 80,000 41,000 99,000 4,000 300 13,000 9,000 8,500 24,000 Purchases discounts 100 1,000 1,500 6,000 2,000 in Transportation- out Prepaid insurance Insurance expense 1. Net Sales for the period is: 2. The Total Cost of net purchases for the period is: 3. Cost of Goods Available for Sale for the period is: 4. Cost of Goods Sold for the period is: 5. Gross Profit is: 6. Net Income is:

Solution

1. Net sales = sales - sales discounts - sales returns and allowances = 80000-400-100 =79500

2. Total cost of net purchase = purchase - purchase discounts - purchase returns and allowances = 41000-100-200 = 40700

3.cost of goods available for sale =beginning inventory + net purchase = 5000+40700=45700

4. Cost of goods sold = cost of goods available for sale - ending inventory = 45700-3000=42700

5. Gross profit = net sales - cost of goods sold - Wages expense - transportation - in = 79500-42700 - 9000-1000= 26800

6. Net income = gross profit - insurance expense - selling expense - interest expense - depreciation expense = 26800-2000-4000-300-10000 =10500