compute rachael ray rsquo s 2011 operating expenses if net income is 130 000 and the 581655

On January 1, 2011, Rachael Ray Corporation had merchandise inventory of $50,000. At December 31, 2011, Rachael Ray had the following account balances.

Freight in

$ 4,000

Purchases

500,000

Purchase discounts

6,000

Purchase returns and allowances

2,000

Sales

800,000

Sales discounts

5,000

Sales returns and allowances

10,000

At December 31, 2011, Rachael Ray determines that its ending inventory is $60,000.

Instructions

(a) Compute Rachael Ray’s 2011 gross profit.

(b) Compute Rachael Ray’s 2011 operating expenses if net income is $130,000 and there are no nonoperating activities.