Under the periodic inventory system, what account is debited when an estimate is made for the cost of merchandise inventory sold this year, but expected to be returned next year? (a) Estimated Returns Inventory (b) Sales Returns and Allowances (c) Merchandise Inventory (d) Customer Refunds Payable

Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.

Ratio Analysis The following information was taken from Logsden Manufacturings trial balances as of December 31, 2018, and December 31, 2019. Required: 1. Calculate the gross profit margin and operating margin percentage for 2019. ( Note: Round answers to two decimal places.) 2. Assuming that all of the operating expenses are fixed (or, wont change as sales increase or decrease), what will be the operating margin percentage if sales increase by 25%?

Direction: The following list of accounts for Pazado, Inc is available at the end of December 2020. Make a summary of Income Statement from the given information below with the following required data. 1. Calculate the turnover/ROI 2. Calculate the consumption of goods for sale 3. Prepare the Income Statement of Pazado, Inc for year 2020. Sales Rent Expense Depreciation Expense Utilities Expense Taxes and Licenses Goods Available for Sale Merchandise, Inventory, January 31 Salaries Expense Freight, out Uncollectible Accounts Sales Discount Sales Returns and Allowance 902,000 30,000 11,250 18,000 15,000 714,900 102,000 50,000 3.920 19,100 5,000 13,000

Perform a horizontal analysis for the entry "Gross Sales" shown on the income statement portion below. (Round percentages to one decimal place.)       Increase/Decrease Revenue 2019 2018 Amount Percent     Gross Sales $277,000 $200,100 $   %     Less: Sales Returns    and Allowances 14,200 12,400     Net Sales 262,800 187,700     Cost of Goods Sold           Merchandise Inventory 31,900 33,800         Net Purchases 60,300 55,500         Goods Available for Sale 92,200 89,300         Less: Merchandise    Inventory, Dec. 31 43,000 60,200     Cost of Goods Sold 49,200 29,100     Gross Margin 213,600 158,600

Determining Gross Profit During the current year, merchandise is sold for $821,000. The cost of merchandise sold sold is $599,330. a.  What is the amount of the gross profit?$ b.  Compute the gross profit percentage (gross profit divided by sales). Round to the nearest whole number.% c.  When will the income statement necessarily report a net income?

Determining gross profitDuring the current year, merchandise is sold for $31,850,000. The cost ofthe merchandise sold is $24,206,000. a. What is the amount of the gross profit?b. Compute the gross profit percentage (gross profit divided by sales).c. Will the income statement necessarily report o net income? Explain.

Practice Test: Multi-step Income Statement Prepare a multi-step income statement for Prestige Traders and General Merchandise for the year ended December 31,2020 using the information listed below: Cost of Sales – P 348,000 Sales - P 600,000 Sales Discount -P 11,000 Depreciation Expense - P7,350 Taxes – P 1,120 Sales Returns and Allowances - P 20,000 Supplies Expense - P 8,750 Rent Expense - P 37,500 Salaries Expense - P 150,000| Use the space provided for your answer.