Mary Kay Cosmetics
Selected data and additional information from the company's records are presented below:
Balance Slicet Data Cash Accountsreceivable Inventories Accounts payable Salaries payable Equipment Accumulated depreciation Bondspayable Common stock Retained earnings Income Statement Data Net sales Cost of goods sold Operating expense (excluding depreciation expense) Net income (Includes depreciation expense and gain) Gain on sale of equipment 2014$235,000$120,00056,00038,00010,000110,00028,000100,000300,00076,0002013246,000$150,00050,00070,0005,00070,00032,000200,000200,000400,0002014$920,000700,000160,00056,0004,000 Additional information:
1. Equipment with a cost of $30,000 and a book value of $18,000 was sold for $22,000 during 2014 .
2. Common stock was issued to retire bonds payable duing 2014 .
3. The only items affecting retained earnings in 2014 were net income and dividends declared and paid. Refer to Mary Kay Cosmetics.What is the amount paid for operating expenses during 2014?
Definitions:
Greenmail
To avoid an unfriendly acquisition, a firm may buy shares owned by a potential acquirer at a price above the market price of the stock. The above-market payment is greenmail.
Horizontal Merger
A business consolidation that occurs between firms operating in the same industry, often aiming to increase market share.
Conglomerate Merger
A union between firms that are involved in totally unrelated business activities.
Vertical Merger
A merger between companies in the same industry but at different stages of the production process, aiming at creating efficiencies or reducing costs.