A company has the following information:

• Beginning inventory: $20,000
• Purchases: $50,000
• Freight-in: $2,000
• Purchase returns: $5,000
• Purchase discounts: $3,000
• Ending inventory: $25,000
• Sales revenue: $120,000
• Gross profit percentage: 40%
• Operating expenses: $30,000
• Income tax rate: 25%

Calculate the following:

1. Cost of goods sold
2. Net income
3. Earnings per share (assuming 10,000 shares outstanding)

Answer rating: 100% (QA)

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