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.
|Click Here to View All Chapter 2 Problems at Once||View|
|2||Effect on the Current Ratio||Easy|
|4||Solving for Missing Amounts||Moderate|
Calculating Operating Income
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|6||The Classified Balance Sheet||4:48|
|7||The Multistep Income Statement||12:44|
|8||Retained Earnings vs Shareholder's Equity||6:41|
|9||Ratios: Working Capital||2:29|
|10||Ratios: Current Ratio||4:00|
|11||Gross Profit vs Net Profit||6:15|