Fill in the blanks (a) through (g) for the Corman Company for each of the income statements for years 1 and 2Corman CompanyIncome StatementsFor the years ended December 31?Year 1Year 2Sales$10,000(e)Cost of goods sold?? Merchandise inventory (beginning)375750 Total cost of merchandise purchases3,6254,875 Merchandise inventory (ending) 750(d) Cost of goods sold(a)5,000Gross profit6,7505,200Operating expenses 3,750(c)Net income(b)$ 2,500
What will be an ideal response?
| Corman Company Income Statements For the years ended December 31 | ||
| ? | Year 1 | Year 2 |
| Sales | $10,000 | (e) $10,200 |
| Cost of goods sold | ? | ? |
| Merchandise inventory (beginning) | 375 | 750 |
| Total cost of merchandise purchases | 3,625 | 4,875 |
| Merchandise inventory (ending) | 750 | (d) 625 |
| Cost of goods sold | (a) 3,250 | 5,000 |
| Gross profit | 6,750 | 5,200 |
| Operating expenses | 3,750 | (c) 2,700 |
| Net income | (b) $3,000 | $ 2,500 |
(a) Merchandise inventory, beginning + purchases - Merchandise inventory, ending = Cost of goods sold; $375 + $3,625 - $750 = $3,250
(b) Gross profit - Operating expenses = Net Income; $6,750 -$3,750 = $3,000
(c) Gross profit - Net income = Operating expenses; $5,200 - $2,500 = $2,700
(d) Merchandise inventory, beginning + Purchases - Cost of goods sold= Merchandise inventory, ending; $750 + 4,875 - $5,000 = $625
(e) Cost of goods sold + Gross profit = Sales; $5,200 + $5,000 = $10,200
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