Question

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

Korey?s Comics

Monthly Business Income Statement

Revenue
Sales:
$6,825

Returns:
$215

Net Sales:

Cost of Goods Sold
Beginning Inventory:
$780

Purchases:
$1,795

Goods Available for Sale:

Ending Inventory:
$795

Total Cost of Goods Sold:


Gross Profit::

Operating Expenses
Wages:
$1,460

Rent:
$650

Utilities:
$185

Advertising:
$90

Taxes:
$125

Total Operating Expenses:


Net Income:
a.
$2,320
b.
$2,510
c.
$4,830
d.
$6,610

Answer 1

Net Sales = $6,825 − $215 = $6,610
Goods available = $780 + $1,795 = $2,575
COGS = $2,575 − $795 = $1,780
Gross Profit = $6,610 − $1,780 = $4,830
Total Operating Expenses = $1,460 + $650 + $185 + $90 + $125 = $2,510
Net Income = $4,830 − $2,510 = $2,320

Answer: a. $2,320