PROBLEM 2 (18 pts.) a. c. Sales - (X +X) = Net sales b. Purchases - (X + X) = Net purchases Net purchases + X = Cost of merchandise purchased d. Merchandise inventory (beginning) + cost of merchandise purchased = X Merchandise available for sales X=Cost of merchandise sold f. Net sales - Cost of merchandise sold = X g. X+X= Operating expenses h. Gross profit operating expenses = X i. Income from operations + X - X = Net income. e. PROBLEM 2 (18 pts.) a. c. Sales - (X +X) = Net sales b. Purchases - (X + X) = Net purchases Net purchases + X = Cost of merchandise purchased d. Merchandise inventory (beginning) + cost of merchandise purchased = X Merchandise available for sales X=Cost of merchandise sold f. Net sales - Cost of merchandise sold = X g. X+X= Operating expenses h. Gross profit operating expenses = X i. Income from operations + X - X = Net income. e