On January 1, 2020, Scott Enterprises inventory of 50,000. At December 31, 2020, Scott had the following
Question:
On January 1, 2020, Scott Enterprises inventory of £50,000. At December 31, 2020, Scott 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, 2020, Scott determines that its ending inventory is £60,000.
Instructions
a. Compute Scott’s 2020 gross profit.
b. Compute Scott’s 2020 operating expenses if net income is £130,000 and there are no non-operating activities.
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 =...
Step by Step Answer:
a b Gross profit 333000 Operating expenses Net income 130000 Operating expenses 203000 Sales re...View the full answer
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
