On January 1, 2012, Evangeline Lilly Corporation had merchandise inventory of $50,000. At December 31, 2012, Evangeline Lilly had the following account balances.
|
Freight in |
$ 4,000 |
|
Purchases |
509,000 |
|
Purchase discounts |
6,000 |
|
Purchase returns and allowances |
2,000 |
|
Sales revenue |
840,000 |
|
Sales discounts |
5,000 |
|
Sales returns and allowances |
10,000 |
At December 31, 2012, Evangeline Lilly determines that its ending inventory is $60,000.
Instructions
(a) Compute Evangeline Lilly’s 2012 gross profit.
(b) Compute Evangeline Lilly’s 2012 operating expenses if net income is $130,000 and there are no nonoperating activities.