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For each company, calculate the missing amount.
| Company | Sales Revenue | Cost of Goods Sold | Gross Profit | Operating Expenses | Net Income |
| Lennon | $14,200 | (a) | $6,100 | $2,550 | $3,550 |
| Harison | 14,300 | 9,100 | (b) | 4,100 | 1,100 |
| McCartney | 9,200 | 7,100 | 2,100 | (c) | 550 |
| Starr | 12,200 | 4,100 | 8,100 | 5,550 | (d) |
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♦ Relevant knowledgeOperating expenses are the expenditures that a business makes to manage its business. Operating expenses don’t contain the price of selling goods or capital expenses. This includes salaries rent for offices office equipment as well as depreciation and other expenses.
a.
Cost of goods sold = Sales revenue – Gross profit
Cost of goods sold = $14,200 – $6,100
Cost of goods sold = $8,100
b.
Gross profit = Sales revenue – Cost of goods sold
Gross profit = $14,300 – $9,100
Gross profit = $5,200
c.
Operating expense = Gross profit – Net income
Operating expense = $2,100 – $550
Operating expense = $1,550
d.
Net income = Gross profit – Operating expense
Net income = $8,100 – $5,550
Net income = $2,550
Lennon Company:
Cost of goods sold = Gross profit = $14,000. – $6.100 = $8.100
Harrison Company
Gross Profit = Sales Revenue + Cost of Goods Sold = $14,300 – $9,100 = $5,000.
McCartney Company
Operating expenses = Gross Profit – Net income = $2,100 – $550 = $1,550
Starr Company
Net income = Gross Profit – Operating expenses = $8,100 – $5,550 = $2,550