Supply the Missing Dollar Amounts for the 20X2 Statement of Earnings

question 82

Essay

Supply the missing dollar amounts for the 20X2 statement of earnings of RDS Company by writing your answer in the table provided for you for each of the following independent cases. Show your computations below the table. $\begin{array}{|l|r|r|}\hline&\text { Case A }&\text { Case B }\\\hline \text { Sales revenue } & \$ 8,000&\$6,000 \\\hline \text { Sales returns \& allowances } & 150&? \\\hline \text { Net sales revenue } & ?&?\\\hline \text { Beginning inventory } & 11,000&6,500 \\\hline \text { Purchases } &5,000&? \\\hline \text { Transportation-in } &?&120 \\\hline \text { Purchase returns } & 350&600 \\\hline \text { Goods available for sale } &?&14,790 \\\hline \text { Ending inventory } &10,000&10,470 \\\hline \text { Cost of goods sold } &?&?\\\hline \text { Gross margin } &?&1,450 \\\hline \text { Expenses } & 1,300&? \\\hline \text { Pre-tax profit } & \$800&\$(500) \\\hline\end{array}$

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Definitions:

Technology Bubble

A market condition characterized by the rapid inflation of technology stocks to unsustainable levels, often followed by a sharp decline.

All-Equity Firm

A company that is financed entirely by its shareholders without any debt.

Book Value

The net value of a company's assets minus its liabilities, often used to determine the company's equity value.

Mispriced

A situation in which a financial instrument is valued incorrectly by the market, often presenting opportunities for investors.