Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / The following relate to Farr Corporation for the month of April : Sales Revenue $140,000Gain on the Sale of Land $20,000Cost of Goods Sold $75,000Tax Expense $14,000Advertising Expense $10,000Dividends Paid $7,000Loss on Lawsuit $24,000a

The following relate to Farr Corporation for the month of April : Sales Revenue $140,000Gain on the Sale of Land $20,000Cost of Goods Sold $75,000Tax Expense $14,000Advertising Expense $10,000Dividends Paid $7,000Loss on Lawsuit $24,000a

Accounting

The following relate to Farr Corporation for the month of April : Sales Revenue $140,000Gain on the Sale of Land $20,000Cost of Goods Sold $75,000Tax Expense $14,000Advertising Expense $10,000Dividends Paid $7,000Loss on Lawsuit $24,000a. Determine Farr’s gross profit for the month of April.b. Determine Farr’s net income for the month of April.c. If retained earnings at the beginning of April were $1,500,000, whatwould retained earnings be at the end of April?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

a. Determination of Farr's Gross profit for the month of April:

Gross profit

= Sales Revenue - Cost of goods sold

= $140000 - $75000

= $65000

b. Determination of Farr's Net income for the month of April:

Sales Revenue $140000
Less: Cost of goods sold ($75000)
Gross profit $65000
Less: Operating expenses  
Advertising expense ($10000)
Loss on lawsuit ($24000)
Operating income $31000
Add: Other incomes  
Gain on sale of land $20000
Net operating income $51000
Less: Tax expense ($14000)
NET INCOME $37000

c. Retained Earnings balance at the end of the month, April:

Retained Earnings, Beginning balance $1500000
Add: Net income $37000
Subtotal $1537000
Less: Dividends paid ($7000)
Retained Earnings, Ending balance $1530000
 

Related Questions