Corporation for the The following financial information was summarized from the

Question

Corporation for the The following financial information was summarized from the accounting records of T rain current year ended December 31: Rails LocomotiveCorporate Total Cost of goods sold Direct operating expenses Net sales Interest expense General overhead Income tax Division $47,200 27,200 108,000 Division S30,720 20,040 78,000 S 2,040 18,160 4,700 The gross profit for the Locomotive Division is: a. $47,280 . b. $57,960 c. $27,240 d. $14,790 The net income for Train Corporation is: a. $83,180 b. $35,940 c. $60,840 d. $48,390 The gross profit for the Rails Division is: a. $33.600 b. $8,700 c. $60,800 d. $21,150 7. 8· 9.

Explanation / Answer

7) a) $47280 Gross profit = Net sales - Cost of goods sold = 78000-30720 = $47280 8) b) $35940 Net income = Total net sales - Total of all expenses = 108000+78000-47200-30720-27200-20040-2040-18160-4700 = $35940 9) c) $60800 Gross profit = Net sales - Cost of goods sold = 108000-47200 = $60800

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