Lauren DiLorenzo organized Viva Lingerie Company on January 1, 2010, to manufacture undergarments with a French flair. At the end of 2010, the following income statement was prepared:VIVA LINGERIE...

Lauren DiLorenzo organized Viva Lingerie Company on January 1, 2010, to manufacture undergarments with a French flair. At the end of 2010, the following income statement was prepared: VIVA LINGERIE COMPANY Income Statement For the Year Ended December 31, 2010 Revenues Sales revenue (cash) ………………………………… $276,000 Sales revenue (credit) ………………………………… 192,000 Total revenues ………………………………………… 468,000 Expenses Cost of goods sold ……………………………………. 236,000 Wages expense ………………………………………… 148,000 Advertising expense ……………………………………… 4,000 Interest expense ……………………………………………. 5,000 Utilities expense ………………………………………….. 12,000 Other expenses ……………………………………………. 15,000 Total expenses …………………………………………… 420,000 Net income ………………………………………………. $ 48,000 Required: 1. What was the average amount of monthly revenue? 2. What was the average amount of monthly selling expense? 3. Explain why cost of goods sold is reported as an expense. 4. Explain why utilities expense is reported as an expense. 5. Can you determine how much cash the company had on December 31, 2010? Answer yes or no, and explain your reasoning. View Solution:

Lauren DiLorenzo organized Viva Lingerie Company on January 1 2010