Use the following information to answer the next 6 questions:

The following selected information is taken from the books of the Rick Company

Cash 2,500 Sales 15,000

Accounts receivable 3,000 Purchases returns and allowances 400

Purchases 9,000 Purchases discounts 300

Sales returns and allowances 150 Accounts Payable 3,000

Sales discounts 350 Allowance for Doubtful Accounts 400

Inventory, 1/1/2007 3,000 Selling expense 400

Inventory, 12/31/2007 2,000 Administrative expense 600

Transportation out 300 Bad Debt Expense 200

Transportation in 200 Rent expense 1,000

Dividends 1,500 Insurance expense 500

Net Sales for the period is:

Net Sales = Gross Sales Sales Discount Sales return & allowances

*** Net Sales = $15,000-$350-$150 = $14,500

Cost of net purchases for the period is:

Net Purchases = Gross purchases purchase discount purchase return

*** Net Purchases = $9,000 - $300 - $400 = $ 8,300

Cost of Goods Available for Sale for the period is:

Cost of Goods Available for Sale = opening inventory + purchases closing inventory

*** COGS = $3,000 + $8,300 - $2,000 = $9,300

Cost of Goods Sold for the period is:

*** Cost of Goods Available for Sale = Cost of Goods Sold + Closing inventory

Cost of Goods Sold = $9,300 + $2,000 = $11300

Gross Profit for the period is:

*** Gross Profit = net sales cost of goods sold

Gross Profit = $14,500 - $9,300 = $5,200

Net Income for the period is:

***Net Income = Gross Profit + Operating income Operating expense

Net Income = $5,200 + dividends received selling expense administration expense bad debt expense rent expense insurance expense- transportation in transportation out

Net Income = $5,200 + $1,500 - $400 - $600 - $200 - $1000 - $500 - $200 - $300 = $3500

Please check if these answers are correct