On January 1, 2014, Clover Corporation had inventory of $50,000. At December 31, 2014, Clover had the following account balances.Freight-in …………… $ 4,000Purchases …………… 509,000Purchase discounts ……….. 6,000Purchase returns and allowances ….. 8,000Sales revenue ………… 840,000Sales discounts …………. 7,000Sales returns and allowances …… 11,000At December 31, 2014, Clover determines that its ending inventory is $60,000.Instructions(a) Compute Clover’s 2014 gross profit.(b) Compute Clover’s 2014 operating expenses if net income is $130,000 and there are no nonoperating activities.View Solution:
On January 1 2014 Clover Corporation had inventory of 50 000