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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

A partial work sheet for McKnight Music Store is presented here. The merchandise inventory at the beginning of the fiscal period was $48,473. W. J. McKnight, the owner, withdrew $40,000 during the year.

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Required

  1. 1. Prepare an income statement.
  2. 2. Journalize the closing entries.

Check Figure

Cost of Goods Sold, $192,521

1.

To determine

Prepare an income statement for MM Store for the year ended December 31, 20--.

Explanation

Income statement: The financial statement which reports revenues and expenses from business operations, and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Prepare an income statement for MM Store for the year ended December 31, 20--.

MM Store
Income Statement
For the Year Ended December 31, 20--
Revenue from sales:    
   Sales  $315,483 
   Less: Sales returns and allowances $4,348  
            Sales discounts 1,8176,165 
   Net sales   $309,318
Cost of goods sold:    
   Merchandise inventory, January 1  $48,473 
   Purchases $185,272  
   Less: Purchase returns and allowances$1,547   
            Purchases discounts01,547  
   Net purchases 183,725  
   Add: Freight-in 9,173  
   Delivered cost of purchases  192,898 
  ...

2.

To determine

Prepare closing entries for MM Store.

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