1. From the following revenue and expense portion of a trial, calculate;
   1. Net sales
   2. Cost of sales
   3. Gross profit
   4. Operating expenses
   5. Net income

Sales 10,000 Wages 1,000

Sales returns 200 Utilities 300

Sales discounts 100 Rent 700

Purchases 6,000 Cleaning 100

Purchases returns 500 Miscellaneous 50

2. On January 15, ABC Co, Inc. purchases inventory of $7,000 for A Vender on account. The terms of the credit are 2/15, net 30. On January 28, the company pays their account balance at A Vendor. On January 30, ABC sells of the inventory to XYZ, Co. for $8,000 on credit. ABC gives the credit terms of 2/10, net 60 to XYZ. XYZ pays the entire balance on February 8. ABC had the following expenses for January and February:

Wages 500

Utilities 300

Miscellaneous 200

Make all the applicable journal entries.

Prepare the multi-step income statement.