The Following Is a List of Selected Events for Unger

question 81

Essay

The following is a list of selected events for Unger Sales and Service for 2014. Unger uses a perpetual inventory system and had a zero inventory balance prior to these transactions.
1) Purchased merchandise on account for $67,000.
2) Sold inventory costing $48,000 for $88,000 on account.
3) Paid transportation-out cost of $1,000 on goods sold.
4) Paid salary expense of $25,000.
5) A count of the inventory revealed that there was $18,500 of inventory on hand at the end of 2010.
Required:
Answer the following questions based on the above information.
a) What was Unger's net income for 2014?
b) Compute gross margin and the gross margin percent for 2014.
c) What amount of inventory will appear on the balance sheet for 2014?
d) Prepare an income statement for 2014.

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Definitions:

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