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Calculate the company cost of sales

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Reference no: EM132736969

Question - The following data are some of the accounts of Cool Water Pty Ltd, a retailer of bottled water:

Account Amount

Revenue from sale of bottled water 88000

Interest Income 5400

Purchase of Inventory 43000

Wages and Salaries 13500

Insurance Expense 4750

Rent Expense 7200

Shareholders' Equity as at 1 July 2019 21500

Interest Expense 7500

Retained Earnings as at 1 July 2019 13700

Advertising Expense 4100

Utilities Expense 3000

Inventory as at 1 July 2019 25000

Inventory as at 30 June 2020 36000

In addition, the company owns a van to distribute its bottled water to some milk bars. The company purchased the van for $42000 on 1 July 2019, with an estimated useful life of 6 years and expected residual value of $6000.

REQUIRED - Based on the information given above:

a. Calculate the company's cost of sales.

b. Determine depreciation expense for the van for the year 2020 assuming the company is using straight-line method.

c. Make the income statement for Cool Water Pty Ltd for the year ended 30 June 2020 (ignore income tax expense).

Reference no: EM132736969

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