Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
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. 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?
Expert Solution
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 |
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
