Question

On January 1, 2014, Christel Madan Corporation had inventory of $50,000. At December 31, 2014, Christel Madan had the following account balances.
Freight-in ................ $ 4,000
Purchases ................ 509,000
Purchase discounts ........... 6,000
Purchase returns and allowances ....... 2,000
Sales revenue ............. 840,000
Sales discounts ............. 5,000
Sales returns and allowances ....... 10,000
At December 31, 2014, Christel Madan determines that its ending inventory is $60,000.

Instructions
(a) Compute Christel Madan’s 2014 gross profit.
(b) Compute Christel Madan’s 2014 operating expenses if net income is $130,000 and there are no nonoperating activities.



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  • CreatedJanuary 30, 2014
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