Question

Presented here are the components in Bradley Company’s multi-step income statement for 2018 and 2019. Determine the missing amounts. Net Sales Cost of Gross Operating Net Revenue Goods Sold _Margin Expenses Income FY 2018 $73,000 (a) $34,000 (b) $16,500 FY 2019 (c) $86,000 $53,500 $41,000 (d)

Answer 1

See explanation section.

Step-by-step explanation:

Requirement A

2018

Net sales 73,000

Less: Cost of goods sold 39,000 (Note- A)

Gross profit 34,000

Less: Operating expense 17,500 (Note- B)

Net income 16,500

Note - A = (Net sales - Cost of goods sold) = Gross profit

73,000 - Cost of goods sold = 34,000

Or, 73,000 - 34,000 = Cost of goods sold

Or, 39,000 = Cost of goods sold

Cost of goods sold = 39,000.

Note - B = Gross profit - Operating expense = Net income

Or, 34,000 - Operating expense = 16,500

Or, 34,000 - 16,500 = Operating expense

Or, 17,500 = Operating expense

Operating expense = 17,500.

Requirement B

2019

Net sales $139,500 (Note - C)

Less: Cost of goods sold $86,000

Gross profit $53,500

Less: Operating expense $41,000

Net income $12,500

Note - C = (Net sales - Cost of goods sold) = Gross profit

Or, Net sales - $86,000 = $53,500

Or, Net sales = $86,000 + $53,500

Net sales = $139,500

The net income of 2019 is less than the 2018 net income.