A company began operations at the start of Year 1.
During the year, it had cash sales of $50,000 and credit sales of $450,000. The company collected $420,000 in cash from the credit sales. The company purchased inventory costing $250,000 and paid $18,000 in dividends. The company incurred the following expenses:
| Cost of goods sold | 210,000 | Rent expense | 6,000 |
| Salary expense | 80,000 | Depreciation expense | 4,000 |
| Interest expense | 5,000 | Income tax expense | 57,000 |
Using this information, answer the following questions.
- What would Operating Income on the Dec. 31, Year 1 Income Statement be reported as?
- As of Dec. 31, Year 1, determine the ending balance in the Accounts Receivable
- Determine Ending Retained Earnings as of December 31, Year 1
The Rest Of TheVideos
| 1 | Not completed | Current Assets | 10 min |
| 2 | Not completed | Non-Current Assets | 11 min |
| 3 | Not completed | Current Liabilities | 7 min |
| 4 | Not completed | Non-Current Liabilites | 2 min |
| 5 | Not completed | Contributed Capital | 6 min |
| 6 | Not completed | The Classified Balance Sheet | 5 min |
| 7 | Not completed | The Multistep Income Statement | 13 min |
| 8 | Not completed | Retained Earnings vs Shareholder's Equity | 7 min |
| 9 | Not completed | Ratios: Working Capital | 3 min |
| 10 | Not completed | Ratios: Current Ratio | 4 min |
| 11 | Not completed | Gross Profit vs Net Profit | 7 min |
| 12 | Not completed | Profit Margin | 4 min |
Chapter 2Practice Problems
| Click Here to View All Problems at Once | View | ||
| 1 | Not completed | Current Assets | Easy |
| 2 | Not completed | Effect on the Current Ratio | Easy |
| 3 | Not completed | Retained Earnings | Easy |
| 4 | Not completed | Solving for Missing Amounts | Moderate |
| 5 | Not completed | Account Classifications | Hard |
| 6 | Not completed | Calculating Operating Income You are here. | Hard |