On January 1, 2014, Clover Corporation had inventory of $50,000. At December 31, 2014, Clover had the

Question:

On January 1, 2014, Clover Corporation had inventory of $50,000. At December 31, 2014, Clover had the following account balances.

Freight-in ............................................. $ 4,000

Purchases ...........................................509,000

Purchase discounts .............................. 6,000

Purchase returns and allowances ...... 8,000

Sales revenue ....................................840,000

Sales discounts .................................... 7,000

Sales returns and allowances .......... 11,000

At December 31, 2014, Clover determines that its ending inventory is $60,000.

Instructions

(a) Compute Clover’s 2014 gross profit.

(b) Compute Clover’s 2014 operating expenses if net income is $130,000 and there are no nonoperating activities.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...