Accounting and Finance Foundations

Unit 7

Accounting and Finance Foundations Unit 7: Financial Statements 554

Financial Statements

Chapter 18

Student Assignment

18.1.3 Income Statement Word Problems

1. Tyler’s Supply Company had sales of $456,980 in 2012. Sales returns and allowances for that year were
   $3,875. What were Tyler’s net sales?


2. Nathan’s Bookstore had a beginning inventory on January 1 of $297,530. The amount of purchases
   throughout the month was $432,640. The store’s ending inventory on January 31 was $310,000. What
   was the cost of goods sold for the month?


3. A company’s net sales for the month were $64,000. The cost of goods sold for the same period was
   $37,580. What is the company’s gross profit for the month?


4. LJ Company had a gross profit of $56,930 during October. During the same month it had these expenses:
   salaries, $35,795; advertising, $2,300; insurance, $8,700; and utilities, $1,940.

a. What were LJ Company’s total expenses?

b. What was the amount of net income or net loss?

5. For the month of June, total sales at Carson Paint and Supply were $95,620. The sales returns and al-
   lowances for the month totaled $980. What were the net sales for the month?


6. If sales returns and allowances for a period total $1,560 and net sales were $67,890, what was the amount
   of sales for the period?


7. Find the cost of goods sold if the beginning inventory is $3,560, purchases made are $2,800, and ending
   inventory is $3,800.


8. If total sales were $96,940.23, sales returns and allowances were $4,210.75, and cost of goods sold were
   $43,922.80, what were the net sales?


9. A lumber store had net sales of $987,000 for the month of July. The cost of goods sold during the month
   was $645,000, and operating expenses were $212,000. Find the gross profit on sales for the month of
   July. Find the net income for the month.