Supporting computations : Multiple choice Income Statement

Prob 6-11/ 4-13 Melissa Company

Cost of goods sold 1,250,000 x 6 7,500,000
Add : Ending inventory 500,000
Total available 8,000,000
Less : Beginning inventory 400,000
Net purchases 7,600,000
Freight In ( 300,000)
Purchase returns 900,000
Gross purchases 8,200,000 D
Problem 6-12/4-14
COS 6,200,000/.8 = 7,750,000 Net sales + 750,000 SRA = 8,500,000 Gross sales B

6-13/4-15 D
Net income per books 7,410,000
Unrealized loss through OCI 540,000
Adjustment of profit of prior year 750,000
Gain on credit risk ( 500,000 )
Adjusted net income 8,200,000 C

Problem 6-14/4-16 Pearl Company

Unadjusted net income 5,000,000
Adjustment of prior year’s profit 1,400,000
Dividend received from Cinn Company ( 320,000 )
Adjusted income 6,080,000 D