Rennie's Electronic Gadgets sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2020 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the "V380PRO" camera bulbs were completed during the quarter. April 7 April 30 May 6 May 9 May 31 June 5 June 14 90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 cash on each bulb to have the inventory shipped from the point of purchase to their business location. Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase. 116 bulbs were sold during June at a unit selling price of $12,250. An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the storeroom. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. June 30 June 30 The sales for April were 75 bulbs which yielded total sales revenue of $803,250. (15 of these bulbs were sold on account to longstanding customers of the business) A new batch of 80 bulbs was purchased at a total cost of $654,800 Upon inspection of the bulbs purchased on May 6, five (5) of the units were found to be defective and were returned to the supplier. During the month 62 of the camera bulbs were sold at a price of $11,450 each. A customer, to whom 7 of the bulbs were sold during the first business day of May, returned 3 units of the merchandise, as they were of another make & model.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Given that selling, distribution and administrative costs associated with the V380PRO brand of WIFI SMART camera bulbs for the quarter were $27,255, $42,400, and $145,600 respectively, prepare an income statement

Transcribed Image Text:Rennie's Electronic Gadgets sells a variety of electronic devices including a variety of WIFI SMART camera bulbs. The business began the second quarter (April to June) of 2020 with 15 (V380PRO) camera bulbs at a total cost of $108,750. The following transactions relating to the "V380PRO" camera bulbs were completed during the quarter. April 7 April 30 May 6 May 9 May 31 June 5 June 14 90 bulbs were purchased at a cost of $6,850 each. In addition, the business paid freight charges of $800 cash on each bulb to have the inventory shipped from the point of purchase to their business location. Owing to an increased demand, a further 110 bulbs were purchased at a cost of $9,000 each; the supplier gave a 3% quantity discount on the purchase. 116 bulbs were sold during June at a unit selling price of $12,250. An actual count of inventory was carried out at the close of business which revealed that there were 36 units of the V380PRO brand of merchandise in the storeroom. Unless otherwise stated, assume that all purchases were on account and received on the dates stated. June 30 June 30 The sales for April were 75 bulbs which yielded total sales revenue of $803,250. (15 of these bulbs were sold on account to longstanding customers of the business) A new batch of 80 bulbs was purchased at a total cost of $654,800 Upon inspection of the bulbs purchased on May 6, five (5) of the units were found to be defective and were returned to the supplier. During the month 62 of the camera bulbs were sold at a price of $11,450 each. A customer, to whom 7 of the bulbs were sold during the first business day of May, returned 3 units of the merchandise, as they were of another make & model.

Expert Solution

Step 1: Calculation of sales

SALES DURING THE QUARTERS-

DATE	PARTICULARS	AMOUNT	WORKING
APRIL-30	SALES	$803250	(75 UNITS @ $10710)
MAY-31	SALES	$709900	(62 UNITS @$11450)
JUNE -30	SALES	$1421000	(116 UNITS @$12250)
	TOTAL SALES	$2934150
	LESS- SALES RETURN	($34350)	(3 UNITS @$11450)
		$2899800