Presented below is financial information for two different companies. Compute the missing amounts.
Windsor Company Sheridan Company
Sales revenue 96,570
Sales returns and allowances 5,420
Net sales 81,960 94,350
Cost of goods sold 55,730
Gross profit 40,900
Operating expenses 15,070 21,380
Net income 19,520

Answer and Explanation:

The computation of missing amounts is shown below:-

a. Net Sales = Sales revenue - Sales returns and allowances

$81,960 = $96,570 - Sales returns and allowances

Sales returns and allowances = $96,570 - $81,960

= $14,610

b. Gross Profit = Net sales - Cost of goods sold

= $81,960 - $55,730

= $26,230

c. Net income = Gross Profit - Operating expenses

= $26,230 - $15,070

= $11,160

d. Sales revenue = Net sales + Sales returns and allowances

= $94,350 + $5,420

= $99,770

e. Cost of goods sold = Net sales - Gross Profit

= $94,350 - $40,900

= $53,450