Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Our Q&A platform provides quick and trustworthy answers to your questions from experienced professionals in different areas of expertise. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

Below is last month's business income statement for Korey's Comics. Using the information provided in the statement, determine both the gross profit and net income for Korey's Comics last month.

\begin{tabular}{|c|c|c|}
\hline
\multicolumn{3}{|l|}{\textbf{Monthly Business Income Statement}} \\
\hline
\multirow{4}{}{\textbf{Revenue}} & Sales: & \$5,670 \\
\cline{2-3}
& Returns: & \$185 \\
\cline{2-3}
& Net Sales: & \\
\hline
\multirow{7}{}{\textbf{Cost of Goods Sold}} & Beginning Inventory: & \$625 \\
\cline{2-3}
& Purchases: & \$1,460 \\
\cline{2-3}
& Goods Available for Sale: & \\
\cline{2-3}
& Ending Inventory: & \$665 \\
\cline{2-3}
& Total Cost of Goods Sold: & \\
\hline
GROSS PROFIT: & & \\
\hline
\multirow{2}{*}{\textbf{Operating Expenses}} & Wages: & \$1,230 \\
\cline{2-3}
& Rent: & \\
\hline
\end{tabular}

Sagot :

GinnyAnswer
Let's go through each part of the income statement step-by-step to determine the gross profit and net income for Korey's Comics last month.

### Step 1: Calculate Net Sales
Net sales are calculated by subtracting returns from the total sales.

- Sales: $5,670
- Returns: $185

[tex]\[ \text{Net Sales} = \text{Sales} - \text{Returns} \][/tex]
[tex]\[ \text{Net Sales} = 5,670 - 185 \][/tex]
[tex]\[ \text{Net Sales} = 5,485 \][/tex]

### Step 2: Calculate Goods Available for Sale
Goods available for sale are calculated by adding the beginning inventory to purchases.

- Beginning Inventory: $625
- Purchases: $1,460

[tex]\[ \text{Goods Available for Sale} = \text{Beginning Inventory} + \text{Purchases} \][/tex]
[tex]\[ \text{Goods Available for Sale} = 625 + 1,460 \][/tex]
[tex]\[ \text{Goods Available for Sale} = 2,085 \][/tex]

### Step 3: Calculate Total Cost of Goods Sold
Total cost of goods sold is calculated by subtracting the ending inventory from the goods available for sale.

- Goods Available for Sale: $2,085
- Ending Inventory: $665

[tex]\[ \text{Total Cost of Goods Sold} = \text{Goods Available for Sale} - \text{Ending Inventory} \][/tex]
[tex]\[ \text{Total Cost of Goods Sold} = 2,085 - 665 \][/tex]
[tex]\[ \text{Total Cost of Goods Sold} = 1,420 \][/tex]

### Step 4: Calculate Gross Profit
Gross profit is calculated by subtracting the total cost of goods sold from net sales.

- Net Sales: $5,485
- Total Cost of Goods Sold: $1,420

[tex]\[ \text{Gross Profit} = \text{Net Sales} - \text{Total Cost of Goods Sold} \][/tex]
[tex]\[ \text{Gross Profit} = 5,485 - 1,420 \][/tex]
[tex]\[ \text{Gross Profit} = 4,065 \][/tex]

### Step 5: Calculate Net Income
Net income is calculated by subtracting operating expenses from gross profit. Given that rent is not specified clearly, we will use only wages as the operating expense in this calculation.

- Gross Profit: $4,065
- Operating Expenses (Wages alone): $1,230

[tex]\[ \text{Net Income} = \text{Gross Profit} - \text{Operating Expenses} \][/tex]
[tex]\[ \text{Net Income} = 4,065 - 1,230 \][/tex]
[tex]\[ \text{Net Income} = 2,835 \][/tex]

### Final Summary:
- Net Sales: $5,485
- Goods Available for Sale: $2,085
- Total Cost of Goods Sold: $1,420
- Gross Profit: $4,065
- Net Income: $2,835

Thus, Korey's Comics had a gross profit of [tex]$4,065 and a net income of $[/tex]2,835 last month.
Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We appreciate your time. Please come back anytime for the latest information and answers to your questions. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.