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Principles of Accounting Volume 1

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 22Q: The following is select account information for August Sundries. Sales: $850,360; Sales Returns and...

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The following are taken from the record of ABM Company for the year ended December 31,
20X2:
DEBIT
CREDIT
P764,985
8,200
5,465
|Sales
Purchase Discount
Purchase Returns and allowances
Purchases
Freight-in
Sales discount
Sales returns and allowances
Depreciation Expense
Amortization expense
Salaries Expense
Utilities Expense
Advertising Expense
Rent Expense
Interest Income
Interest Expense
Gain on sale of PPE
Bad Debts Expense
459,990
9,180
13,300
5,455
25,000
10,000
80,000
55,000
35,000
60,000
5,444
5,677
5.465
???
• Based on actual physical count, inventory balance are as follows:
| January 1, 20X2
P25,455
December 31, 20X2
P20,765
• Bad debts expense is 4% of net sales. Classify the bad debt expense as
general and administrative expense.

Determine the following by preparing a multi-step form of SCI.
a. Net Sales
b. Net Purchases
c. Cost of goods sold
d. Bad debts expense
e. Gross Profit
f. Total Expenses
g. Net Income/Loss

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The following is select account information for August Sundries. Sales: $850,360; Sales Returns and Allowances: $148,550; COGS: $300,840; Operating Expenses: $45,770; Sales Discounts: $231,820. If August Sundries uses a multi-step income statement format, what is their gross margin?
Refer to RE5-1. Prepare a single-step income statement for Brandt Corporation for the current year.
Presented below are certain account balances of Novak Products Co. Rent revenue $7,170 Sales discounts $8,240 Interest expense 13,450 Selling expenses 99,740 Beginning retained earnings 114,990 Sales revenue 401,100 Ending retained earnings 134,490 Income tax expense 26,796 Dividend revenue 71,710 Cost of goods sold 166,306 Sales returns and allowances 12,750 Administrative expenses 84,010 Allocation to noncontrolling interest 20,840 From the foregoing, compute the following: (a) total net revenue, (b) net income, (c) income attributable to controlling stockholders, if Novak has allocation to noncontrolling interest of $20,840. (a) Total net revenue ($enter total net revenue in dollars) (b) Net income ($enter net income in dollars) (c) Income attributable to controlling stockholders ($enter income attributable to controlling stockholders in dollars)
The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…
The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…
The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…
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Milford Company uses the percent-of-sales method to estimate uncollectibles. Netcredit sales for the current year amount to $140,000, and management estimates 2% will beuncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $3,000. The amount of expense to report on the income statement will bea. $1,500.b. $2,800.c. $8,400.d. $5,800.Q5-46. Refer to Q5-45. The balance of Allowance for Uncollectible Accounts, after adjustment, will bea. $5,200.b. $5,800.c. $1,500.d. $2,800.
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