Brand new chapter 5 and 6 equations accounting 11/8

Gross profit

Sales revenue − Cost of goods sold

Income from operations

Gross profit − Operating expenses

Net sales

Sales revenue − Sales returns and allowances − Sales discounts

Net purchases

Purchases − Purchase returns and allowances − Purchase discounts

Cost of goods purchased

Net purchases + Freight-in

Cost of goods available for sale

Beginning inventory + Cost of goods purchased

Cost of goods sold (full)

Beginning inventory + Cost of goods purchased − Ending inventory

Purchases (solving for)

COGS + Ending inventory − Beginning inventory

Ending inventory (solving for)

Beginning inventory + Purchases − COGS

Purchase discount amount

Discount % × (Invoice amount − Returns)

Payment within discount period

Invoice amount − Returns − Purchase discount

Cash received within discount period

Sales − Sales returns − Sales discount

Income before income taxes

Income from operations + Other revenues and gains − Other expenses and losses

Net income

Income before income taxes − Income tax expense

Cost of goods available for sale (cost flow)

Beginning inventory cost + Cost of purchases

Cost of goods sold (cost flow)

Cost of goods available for sale − Ending inventory

Weighted-average unit cost

Cost of goods available for sale ÷ Total units available

Average cost ending inventory

Ending units × Weighted-average unit cost

Average cost of goods sold

Units sold × Weighted-average unit cost

LIFO reserve

FIFO ending inventory − LIFO ending inventory