Below Is an Extract from an Income Statement The Cost of Sales Is:
A) $29 500

question 4

Multiple Choice

Below is an extract from an income statement.
$$\begin{array} { l r } &\$ \\\text { Beginning inventory } & 28000 \\\text { Gross sales } & 36000 \\\text { Freight-in } & 2500 \\\text { Sales returns } & 4000 \\\text { Ending inventory } & 25200 \\\text { Purchases } & 31600\end{array}$$
The cost of sales is:

• A) $29 500.
• B) $32 000.
• C) $34 400.
• D) $36 900.

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Definitions:

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee, usually through ownership of 20-50% of voting stock.

Bonds Payable

Long-term liabilities represented by promissory notes issued by a company to borrow funds, repayable at a specified future date along with interest.

Unamortized Discount

The portion of a bond's issue price that is below its face value and has not yet been expensed over the life of the bond.

Straight-Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.