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Selected data for three companies are given below. All inventory amounts are ending balances and all amounts are in millions.
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Using the above data, calculate operating income for each company. (Enter amounts in millions as provided to you in the problem statement, $X.)
Begin by calculating the operating income for Company A.
| Company A |
| (1) | | |
| (2) | | |
| Gross Profit | | |
| Selling and Administrative Expenses: | | |
| | (3) | | |
| | (4) | | |
| Total Selling and Administrative Expenses | | |
| Operating Income | | |
Now calculate the operating income for Company B.
| Company B |
| (5) | | |
| Expenses: | | |
| | (6) | | |
| | (7) | | |
| Total Expenses | | |
| Operating Income | | |
Finally, calculate the operating income for Company C.
| Company C |
| (8) | | |
| (9) | | |
| Gross Profit | | |
| Selling and Administrative Expenses: | | |
| | (10) | | |
| | (11) | | |
| Tota Selling and Administrative Expenses | | |
| Operating Income | | |
1: Data Table
| Company A | | Company B | | Company C |
| Cash | $7 | | Wages Expense | $28 | | Administrative Expenses | $3 |
| Net Sales Revenue | 41 | | Equipment | 24 | | Cash | 9 |
| Finished Goods Inventory | 2 | | Accounts Receivable | 5 | | Net Sales Revenue | 42 |
| Cost of Goods Sold | 32 | | Service Revenue | 54 | | Selling Expenses | 4 |
| Selling Expenses | 5 | | Cash | 12 | | Merchandise Inventory | 22 |
| Equipment | 51 | | Rent Expense | 6 | | Equipment | 52 |
| Work-in-Process Inventory | 4 | | | | | Accounts Receivable | 15 |
| Accounts Receivable | 9 | | | | | Cost of Goods Sold | 32 |
| Cost of Goods Manufactured | 28 | | | | | | |
| Administrative Expenses | 2 | | | | | | |
| Raw Materials Inventory | 9 | | | | | | |
(1)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Manufactured
Cost of Goods Sold
Equipment
Finished Goods Inventory
Net Sales Revenue
Raw Materials Inventory
Selling Expenses
Work-in-Process Inventory
(2)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Manufactured
Cost of Goods Sold
Equipment
Finished Goods Inventory
Net Sales Revenue
Raw Materials Inventory
Selling Expenses
Work-in-Process Inventory
(3)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Manufactured
Cost of Goods Sold
Equipment
Finished Goods Inventory
Net Sales Revenue
Raw Materials Inventory
Selling Expenses
Work-in-Process Inventory
(4)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Manufactured
Cost of Goods Sold
Equipment
Finished Goods Inventory
Net Sales Revenue
Raw Materials Inventory
Selling Expenses
Work-in-Process Inventory
(5)
Accounts Receivable
Cash
Equipment
Rent Expense
Service Revenue
Wages Expense
(6)
Accounts Receivable
Cash
Equipment
Rent Expense
Service Revenue
Wages Expense
(7)
Accounts Receivable
Cash
Equipment
Rent Expense
Service Revenue
Wages Expense
(8)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Sold
Equipment
Merchandise Inventory
Net Sales Revenue
Selling Expenses
(9)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Sold
Equipment
Merchandise Inventory
Net Sales Revenue
Selling Expenses
(10)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Sold
Equipment
Merchandise Inventory
Net Sales Revenue
Selling Expenses
(11)
Accounts Receivable
Administrative Expenses
Cash
Cost of Goods Sold
Equipment
Merchandise Inventory
Net Sales Revenue
Selling Expenses
Answer & Explanation
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