Question 1

The following amounts have been extracted from the accounts of Sell-It at its year-end, December 31, 20x9:

Sales	$	50,000
Cost of Goods Sold	$	35,000
Inventory	$	10,000
Account Payable	$	8,000

The gross profit which Sell-it would report is

Multiple Choice

$15,000

$40,000

$7,000

None of the other alternatives are correct

$50,000

Question 2

AB Ltd. presents the following selected accounts, all balances are after adjusting journal entries. All accounts have normal balances (accounts which are normally debits have debit balances here and visa-versa). Prepare a multi-step income statement.

Advertising Expense 1,300 Advetising Payable 1,520 Interest Expense 350 Interest Payable 1,050 Inventory at beginning of the period 15,100 Inventory at the end of the period 10,200 Equipment - Accumulated Depreciation 800 Equipment - Depreciation Expense 100 Purchases 8,005 Purchases Discounts 550 Purchases Returns and Allowance 70 Salary and Wages Expense 7,100 Salary and Wages Payable 530 Sales 32,738 Sales Discounts 880 Sales Returns and Allowances 1,230 Transportation In 400 Transportation Out 300 Utilities Expense 8,005

Required 1: ABs Net Sales for the period must have been: $

Required 2: ABs Cost of Goods Available for Sale for the period must have been: $

Required 3: ABs Cost of Goods Sold for the period must have been: $

Required 4: ABs Gross Profit on Sales in dollars for the period must have been: $

Required 5: ABs total Operating Expenses (not including COGS) for the period must have been: $

Required 6: ABs Net Income (loss) in dollars for the period must have been: $