Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 3, Problem 14E
Comparing gross margin and gain on sale of land
Lopez Sales Company had the following balances in its accounts on January 1, 2018:
Lopez experienced the following events during 2018:
1. Sold merchandise inventory that cost $22,000 for $40,500.
2. Sold land that cost $30,000 for $46,000.
Required
a. Determine the amount of gross margin recognized by Lopez.
b. Determine the amount of the gain on the sale of land recognized by Lopez.
c. Comment on how the gross margin versus the gain will be recognized on the income statement.
d. Comment on how the gross margin versus the gain will be recognized on the statement of cash flows.
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Use the following excerpts from Victrolia Company’s financial information.
2018 Income Statment
Balance Sheets
Sales
$475,000
Cost of Goods Sold
(221,500)
Operating Expenses, other thanDepreciation Expense
(60,600)
Depreciation Expense
(21,000)
Gain on Sale of Plant Assets
23,500
Net Income
$195,400
Dec. 31,2018
Cash
$347,450
Accounts Receivable
39,750
Inventory
33,000
Accounts Payable
17,550
Accured Liabilities
3,500
Dec. 31, 2017
Cash
$133,500
Accounts Receivable
36,500
Inventory
35,000
Accounts Payable
19,550
Accured Liabilities
2,200
Additional Information:
Plant assets were sold for $45,000; book value $16,500
Dividends of $22,000 were declared and paid
Cash Flow from Financing Activities:
$Dividends Paid
I just need the answer on dividends answer box?
MHD LLC a trading company dealing in fast moving consumer goods. Their trading results for the year ending 31st Dec, 2018 shows profit of RO45750.
The following additional information is also given:
The company owned a building cost RO90000. Company charged depreciation on building at 9% per annum while in Oman tax law it is prescribed @ 4%.
Company purchased a land for business purposes costing RO30000. The accountant charged depreciation on land at 10% per annum.
The company made a donation on the occasion of Ramadan festival worth RO4500 which was charged on the income statement. The gross income of the company amounts to RO52650 before correcting the inventory valuation.
The ledger book overvalued the opening inventory by RO1350 and undervalued closing inventory by RO1250
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Company also offering credit sales to its customers. One of the customers…
Use the following excerpts from Victrolia Company’s financial information.
2018 Income Statment
Balance Sheets
Sales
$455,000
Cost of Goods Sold
(221,500)
Operating Expenses, other thanDepreciation Expense
(58,600)
Depreciation Expense
(20,000)
Gain on Sale of Plant Assets
23,500
Net Income
$178,400
Dec. 31,2018
Cash
$329,450
Accounts Receivable
39,750
Inventory
31,000
Accounts Payable
17,550
Accured Liabilities
3,500
Dec. 31, 2017
Cash
$133,500
Accounts Receivable
36,500
Inventory
35,000
Accounts Payable
19,550
Accured Liabilities
2,200
Additional Information:
Plant assets were sold for $45,000; book value $16,500
Dividends of $24,000 were declared and paid
Prepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments.
Victrolia CompanyStatement of…
Chapter 3 Solutions
Survey Of Accounting
Ch. 3 - 1. Define merchandise inventory. What types of...Ch. 3 - 2. What is the difference between a product cost...Ch. 3 - 3. How is the cost of goods available for sale...Ch. 3 - 4. What portion of cost of goods available for...Ch. 3 - 5. When are period costs expensed? When are...Ch. 3 - 6. If PetCo had net sales of 600,000, goods...Ch. 3 - Prob. 7QCh. 3 - 8. What are the effects of the following types of...Ch. 3 - 9. Northern Merchandising Company sold inventory...Ch. 3 - 10. If goods are shipped FOB shipping point, which...
Ch. 3 - 11. Define transportation-in. Is it a product or a...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - 14. Dyer Department Store purchased goods with the...Ch. 3 - 15. Eastern Discount Stores incurred a 5,000 cash...Ch. 3 - 16. What is the purpose of giving credit terms to...Ch. 3 - Prob. 17QCh. 3 - 18. Ball Co. purchased inventory with a list price...Ch. 3 - 22. Explain the difference between purchase...Ch. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - 25. What is the advantage of using common size...Ch. 3 - 27. What is the purpose of preparing a schedule of...Ch. 3 - 28. Explain how the periodic inventory system...Ch. 3 - Prob. 25QCh. 3 - Exercise 3-1 Determining the cost of financing...Ch. 3 - Exercise 3-2 Comparing a merchandising company...Ch. 3 - Exercise 3-3 Effect of inventory transactions on...Ch. 3 - Exercise 3-4 Effect of inventory transactions on...Ch. 3 - Exercise 3-5 Recording inventory transactions in a...Ch. 3 - Exercise 4-6A Understanding the freight terms FOB...Ch. 3 - Exercise 3-7 Effect of purchase returns and...Ch. 3 - Exercise 3-8 Accounting for product costs:...Ch. 3 - Effect of product cost and period cost: Horizontal...Ch. 3 - Cash Discounts and Purchase Returns On April 6,...Ch. 3 - Exercise 4-9A Determining the effect of inventory...Ch. 3 - Inventory financing costs Bill Norman comes to you...Ch. 3 - Effect of shrinkage: Perpetual system Ho Designs...Ch. 3 - Comparing gross margin and gain on sale of land...Ch. 3 - Single-step and multistep income statements The...Ch. 3 - Prob. 16ECh. 3 - Effect of cash discounts on financial statements:...Ch. 3 - Using common size statements and ratios to make...Ch. 3 - Prob. 19ECh. 3 - Determining cost of goods sold: Periodic system...Ch. 3 - Identifying product and period costs Required...Ch. 3 - Problem 4-23A Identifying freight costs Required...Ch. 3 - Effect of purchase returns and allowances and...Ch. 3 - Preparing a schedule of cost of goods sold and...Ch. 3 - Prob. 25PCh. 3 - Comprehensive cycle problem: Perpetual system At...Ch. 3 - Prob. 27PCh. 3 - Comprehensive cycle problem: Periodic system...Ch. 3 - Prob. 1ATCCh. 3 - ATC 3-2 Group Exercise Multistep income statement...Ch. 3 - Prob. 3ATCCh. 3 - Prob. 4ATC
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