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Clearwater Company

Please answer the attached questions following the instructions.

BE5-1 Compute missing amounts in determining net income.
(SO 1)
Presented below are the components in Clearwater Company's income statement. Determine the missing amounts.
Sales Cost of Goods Sold Gross Profit Operating Expenses Net Income
(a) $75,000 ? $28,600 ? $10,800
(b) $108,000 $70,000 ? ? $29,500
(c) ? $71,900 $99,600 $39,500 ?

BE5-5 Prepare sales revenues section of income statement.
(SO 3)
Piccola Company provides the following information for the month ended October 31, 2006: Sales on credit $280,000, cash sales $100,000 sales discounts $13,000, sales returns and allowances$21,000. Prepare the sales revenues section of the income statement based on this information.

BE5-10 Compute net purchases and cost of goods purchased.
(SO 7)
Assume that E. Guard Company uses a periodic inventory system and has these account balances: Purchases $400,000; Purchase Returns and Allowances $11,000; Purchase Discounts $8,000; and Freight-in $16,000. Determine net purchases and cost of goods purchased.

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Week Five

BE5-1 Compute missing amounts in determining net income.
(SO 1)
Presented below are the components in Clearwater Company's income statement. Determine the missing amounts.
Sales Cost of Goods Sold Gross Profit Operating Expenses Net Income
(a) $75,000 ? $28,600 ? $10,800
(b) $108,000 $70,000 ? ? $29,500
(c) ? $71,900 $99,600 $39,500 ?

Sales - Cost of Goods Sold = Gross Profit - Operating Expenses = Net Income

a) Sales - Cost of Goods Sold = Gross Profit
75,000 - Cost of Goods Sold = 28,600
Cost ...

Solution Summary

This solution is comprised of a detailed explanation to answer the accounting questions.

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