5 On December 10 2016 Jennings Inc paid out total dividends

5. On December 10, 2016, Jennings, Inc. paid out total dividends of $526,400 (this was the only dividend payment made during the year). If Jennings reported Retained earnings of $2,168,500 for 2015 and Retained earnings of $2,830,200 for 2016, what was Jennings reported net income in 2016?

6. In 2016, Variman, Incorporated had Gross Accounts receivable of $2,612,400 and management estimated the Allowance for Doubtful accounts to be $85,130. Compute the ratio of Allowance of Doubtful accounts to Net Accounts receivable for Variman, Inc. for 2016 (that is, compute Allowance/Net Accounts receivable – record Advertising 412,800 Beginning of year inventory 357,800 Depreciation 37,600 End of year inventory 353,400 General and administrative expenses 368,400 Gross sales 8,465,900 Interest expense 147,800 Lease payments 124,900 Management salaries 1,475,300 Purchases 5,128,900 Research and development 125,400 Returns and allowances 218,300 Taxes 211,900 2 your answer as a percent rounded to one decimal place; for example, record 0.234567 as 23.5%).

7. In 2016, the Whaddock Company purchased 20,380,000 units from its supplier at a cost of $18.00 per unit. Whaddock sold 21,200,000 units of its product in 2016 at a price of $28.00 per unit. Whaddock began 2016 with 1,250,000 units in inventory (inventory is carried at a cost of $18.00 per unit). Using this information, compute Whaddock’s gross profit for 2016.

8. Referring back to the previous question, compute Whaddock’s 2016 ending inventory balance in dollars (valued at cost per unit of $18.00).

Solution

5 Retained earnings at end of 2016 2830200 Add Dividend paid 526400 3356600 Less Retained earnings at end of 2015 2168500 Net income 1188100