Multi-step income

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School

Centennial College *

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123

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Accounting

Date

Jan 9, 2024

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xlsx

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Uploaded by CommodorePowerSquid33

Create a multi-step income statement World Jim operates several retail stores that specialize in products Cost of Goods Sold 68500 Depreciation Expense - Store Equipment 5080 Gain ofSale of Equipment 4220 Insurance Expense 10100 Interest Expense 990 Office Salaries Expense 35600 Office Supplies Expense 3100 Sales Discounts 2300 Sales Returns and Allowances 5500 Sales Revenue 188500 Sales Salaries Expense 34400 Utilities Expense - Office 2300 Utilities Expense - Retail 8000 Sales Revenue 188500 Trial Balanc Less: Sales Discounts 2300 Trial Balanc Sales Returns and Allowances 5500 Trial Balanc Subtotal 7800 Net Sales 180700 Cost of Goods Sold 68500 Trial Balanc Gross Profit 112200 Operating Expenses Selling Expenses Deprecation Expense - Store Equipment5080 Trial Balanc Sales Salaries Expense 34400 Trial Balanc Utilities Expense - Retail 8000 Trial Balanc Total Selling Expenses 47480 Administrative Expenses Insurance Expense 10100 Trial Balanc Office Salaries Expense 35600 Trial Balanc Officse Supplies Expense 3100 Trial Balanc Utilities Expense - Office 2300 Trial Balanc Total Administravtive Expenses 51100 Total Operating Expenses 98580 Income from Operations 13620 World Jim Income Statement For the Year Ended December 31, 2019

Other Income and Expenses Gain on Sale ofEqupiment 4220 Trial Balanc Interest Expense 990 Trial Balanc Total Other Income and Expenses 3230 Net income 16850 If a computer company bought computers for $10,000 and sold them for $16,000 how much would the gross profit be on the entire shipment if the business took ad of the early cash payment terms of 4/10, n/60 from its supplier? Rather than taking back the tables, your sales manager agreed to allow Ben's Retaile if they agree to keep the goods. Record Ben's payment in settlement of the invoice o the allowance is not recorded until the settlement date. Date Account Title and Explanation Debit Credit 1. The company bought computers for $10,000 and sold them, the cost per comp $10,000 divided by the number of computers purchased. Assuming they purchase 2. calculate the revenue generated from selling all 100 computers which would b puters, each computer would cost $100. 3. calculate the gross profit before taking into account the early cash payment ter profit would be the revenue of $16,000 minus the cost of goods sold, which is 100 $10,000. So the gross profit would be $16,000 - $10,000 = $6,000. 4. Terms of 4/10, n/60 from the supplier. This means that if the company pays wi they would receive a 4% discount on the cost of goods sold. So the cost of goods s $10,000 minus 4% of $10,000, which is $400. Therefore, the cost of goods sold wo 5. $16,000 - $9,600 = $6,400 Assume you are the bookkeeper for Vivien's Wholesalers, a distributor of kitchen furniture. You you that Ben's Retailers is unhappy with the quality of some tables delivered on April 6, 2019, a of the goods. The original invoice amounted to $3,000 and the goods cost Vivien's $1,100. Usin system, complete the journal entries for Vivien's Wholesalers for each of the following indepen Discount multipl 0.05 x 3000 = 1

2019 6-May Cash 2850 Sales Returns and Allowances 150 Accounts receivable 3000 Collected outstanding accounts receivable Suppose that Ben's shipped back all of the goods on April 16 and the inventory was put back on the sales floor. Journalize the transactions. Record the Date Account Title and Explanation Debit Credit 2019 16-Apr Sales Returns and Allowances 3000 Number co Accounts Receivable 3000 Record sales returns 16-Apr Merchandise Inventory 1100 This is the Cost of Goods Sold 1100 Restock Inventory Suppose that Ben's shipped back half of the goods on April 16 and kept the other hal Journalize the transactions. Record the sales return transaction first. Date Account Title and Explanation Debit Credit 2019 16-Apr Sales Returns and Allowances 1725 Accounts Receivable 1725 Record sales returns 16-Apr Merchandise Inventory 550 Merchandi Cost of Goods Sold 550 Restock inventory 1725 = the 0.05 x 3000 = 1 To obatin cash a 3000 - 150 = 28 Sales Returns an accounts receivb

On March 19, Food-N-Stuff Wholesalers sold all of the dried fruit inventory to Retail G As the bookkeeper for Food-N-Stuff Wholesalers, journalize the transactions using the Date ccount Title and Explanation Debit Credit 2019 1-Mar Merchandise Inventory 2310 To determine Merchandise cost t Accounts Payable 2310 and add the freight charges of 14 Purchased inventory on account 19-Mar Accounts Receivable 4830 Sales Revenus 4830 Made sales on account 19-Mar Cost of Goods Sold 2310 The amount is the same as purch Merchandise Inventory 2310 Record the cost of goods sold Beds Unlimited received a shipment of bed sheets on September 7, 2019. The value of the bed sheets was $14,000 and the sheets were shipped FOB Freight charges came to $290. This company uses the perpetual inventory A) Prepare the journal entry to record the receipt of goods by Beds Unlimited, assum Date Account Title and Explanati Debit Credit 2019 7-Sep Merchandise Inventory 14290 Cost of Bed Sheets plus Freight C Accounts Payable 14290 14000 + 290 = 14290 Purchased inventory Prepare the journal entry on September 27, 2019 to record the purchase allowance. A Date Account Title and Explanati Debit Credit 2019 27-Sep Accounts Payable 1680 Cost of Bed Sheets multiply by th Merchandise Inventory 1680 0.12 x 14000 = 1680 On March 1, 2019, Food-N-Stuff Wholesalers purchased $2,170 worth of dried fruit in B) The bed sheets delievered to Beds Unlimited were the wrong material. After some

Purchase Allowance c) Journalize the transaction for Beds Unlimited when the payment is made on Octob Date Account Title and Explanati Debit Credit 2019 7-Oct Accounts Payable 12610 Cost of the Original Cost w/ freig Cash 12610 14290 - 1680 = 12610 Payment for the goods Prepare the journal entry for Worn Star Shirt Retailers on June 5. Date Account Title and Explanati Debit Credit 2019 5-Jun Merchandise inventory 20000 Accounts Payable 20000 Payment inventory Prepare the journal entries for Super Shirt Wholesalers on June 5. Record the revenue Date Account Title and Explanati Debit Credit 2019 5-Jun Accounts Receivable 20000 Sales Revenue 20000 Sold inventory on account 5-Jun Cost of Goods Sold 15000 Merchandise Inventory 15000 Cost of goods sold for above sale Super Shirt Wholesalers spent $15,000 to purchase 1,000 shirts from a shirt manufacturer as inventory. Worn Star Shirt Retailers purchased 1,000 shirts for $20,000 from Super Shirt Wholesalers on June 5, 2019. Payment is due on July 5. Both companies use the perpetual inventory system. Suppose that on October 16, 2019, both Company A and Company B sold inventory with a cost of $44,400. The updated balance of inventory as at October 1 for both companies was $113,700. Company A uses the perpetual inventory system. Company B uses the periodic inventory system and performs an inventory count at the end of each month. What is the value of inventory as at October 16 for each company?

CompanyInventory Syste Value of Inventory on October 16 A Perpetual 69300 Original Inventory of $ B Periodic 113700 Date Account Title and Explanati Debit Credit 2019 20-May Accounts Payable 220 Merchandise Inventory 220 Record the purchase return Date Account Title and Explanati Debit Credit 2019 22-Jul Accounts Payable 9440 Merchandise Inventory 9440 Record the purchase return The following is written on an invoice relating to goods that were purchased: 2/15, n/ 2% disocunt would-apply if paid within 15 days. The net amount owing is due in 60 days What is the value of inventory as at October 16 for each company? JP Supermarkets bought $2,170 worth of groceries on account from a produce supplier on May 19, 2019. On May 20, JP's bookkeeper was informed that $220 worth of tomatoes was substandard and returned to the supplier. Prepare the journal entry to record the purchase return using the perpetual inventory system. On July 3, 2019, Quikk-Mart received a shipment of T-shirts from Killers and Kings Clothing for an event. The invoice amounted to $9,440 and was recorded in the accounting system as an amount owing. Soon after the delivery was made, the marketing manager discovered that the logo was printed incorrectly. The goods were returned to Killers and Kings Clothing on July 22. The company uses a perpetual inventory system.

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