SOUND CORE WIRELESS sells a variety of mobile telephone accessories including several brands of Wireless Earbuds Bluetooth Headphones. The earbuds are sold in cases, with each case containing a pair of earbuds. SOUND CORE began the last quarter
SOUND CORE WIRELESS sells a variety of mobile telephone accessories including several brands of
Wireless Earbuds Bluetooth Headphones. The earbuds are sold in cases, with each case containing a pair of
earbuds. SOUND CORE began the last quarter (October to December) of 2021 with 30 cases of the (TOZO
T6) earbuds at a total cost of $187,800. During the quarter the business completed the following transactions
relating to the “TOZO T6” earbuds:
| October 8 | 8 cases were purchased at a cost of $6,202 each. In addition, the business paid a freight charge of $248 cash on each case to have the inventory shipped from the point of purchase to their place of business. |
| October 31 | The sales for October were 85 cases which yielded total sales revenue of $809,030. (25 of these cases were sold on account to three longstanding customers) |
| November 4 | A new batch of 67 cases was purchased at a total cost of $465,650 |
| November 10 | 5 of the cases purchased on November 4 were returned to the supplier, as they were not of the type nor model ordered. |
| November 30 | During the month 60 cases were sold at a price of $10,350 each. |
| December 4 | A customer, to whom 9 cases were sold during the first business day of November, returned 3 of the cases, as they were of another make and model. |
| December 10 | Owing to an increased demand, a further 115 cases were purchased at a cost of $7,900 each; these were subject to a trade discount of 2% each. |
| December 30 | 121 cases were sold during December at a unit selling price of $11,085. |
| December 31 | An actual count of inventory was carried out which revealed that there were 34 cases of the “TOZO T6” brand of merchandise in the store room |
Unless otherwise stated, assume that all purchases were on account and received on the dates stated.
Required: Given that selling, distribution and administrative costs associated with the TOZO T6 brand of
earbuds for the quarter were $42,844, $38,120 and $157,076 respectively, prepare an income
statement for SOUND CORE WIRELESS (TOZO T6) for the quarter ended December 31, 2021.
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