Chapter 3 Solutions.docx - Chapter 3 Selected Exercises EXERCISES E3-1 step 1 Case A Case B Case C Case D Case E Sales revenue \$900 \$700 \$410 \$ \$ Cost

# Chapter 3 Solutions.docx - Chapter 3 Selected Exercises...

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Chapter 3 Selected Exercises EXERCISES E3-1 step 1 Case A Case B Case C Case D Case E Sales revenue \$900 \$700 \$410 \$____* \$___* Cost of sales ___ * 380 ___ * 500 310 Gross profit 400 ___ * ____* ___* 440 Other operating expenses: Selling expense * 150 80 400 250 Administrative expense 150 __ * 60 100 80 _ __ * ___ * ___ * __ * * Earnings before income tax 200 90 * 190 * Income tax expense __ * 30 20 40 30 Net earnings \$170 \$ * \$ 50 \$ * \$80 E3-1 step 2 Case A Case B Case C Case D Case E Sales revenue \$900 \$700 \$410 \$1,190* \$750* Cost of sales 500 * 380 200 * 500 310 Gross profit 400 320 * 210 * 690 * 440 Other operating expenses: Selling expense 50* 150 80 400 250 Administrative expense 150 80 * 60 100 80 200 * 230 * 140 * 500 * 330 * Earnings before income tax 200 90 70* 190 110* Income tax expense 30 * 30 20 40 30 Net earnings \$170 \$ 60 * \$ 50 \$150 * \$80 *Amounts not given in the exercise.
E3-2 VILLAGE CORPORATION Statement of Earnings For the Year Ended, December 31, 2017 Computations in Order Sales revenue ........................................ Given \$70,000 Cost of sales .......................................... (a) \$70,000 – \$24,500 45 ,500 Gross profit ............................................ Given 24 ,500 Operating expenses: Selling expense .................................... Given \$ 8,000 Administrative expense ....................... (c) \$14,500 – \$8,000 6 ,500 Total operating expenses ...................... (b) \$24,500 – \$10,000 14 ,500 Earnings before interest and tax EBIT... Given 10,000 Interest expense .................................... 0

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