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2. Net income, $185,000 Appendix 2 PR 5-10A Periodic inventory accounts, multiple-step income statement, closing entries On December 31, 20Y5, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Instructions 1. Does Wyman Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 20Y5. The inventory as of December 31, 20Y5, was $305,000. The estimated cost of customer returns inventory for December 31, 20Y5, is estimated to increase to $40,000. 3. Prepare the closing entries for Wyman Company as of December 31, 20Y5. 4. What would be the net income if the perpetual inventory system had been used?

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 5, Problem 10PA
Textbook Problem
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2. Net income, $185,000

Appendix 2

PR 5-10A Periodic inventory accounts, multiple-step income statement, closing entries

On December 31, 20Y5, the balances of the accounts appearing in the ledger of Wyman Company are as follows:

Chapter 5, Problem 10PA, 2. Net income, 185,000 Appendix 2 PR 5-10A Periodic inventory accounts, multiple-step income

Instructions

1. Does Wyman Company use a periodic or perpetual inventory system? Explain.

2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 20Y5. The inventory as of December 31, 20Y5, was $305,000. The estimated cost of customer returns inventory for December 31, 20Y5, is estimated to increase to $40,000.

3. Prepare the closing entries for Wyman Company as of December 31, 20Y5.

4. What would be the net income if the perpetual inventory system had been used?

(1)

To determine

Identify whether Company W used periodic inventory system or perpetual inventory system.

Explanation of Solution

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year...

(2)

To determine

Prepare a multi-step income statement of Company W for the year ended December 31, 20Y5.

3.

To determine

Prepare the closing entries of Company W.

4.

To determine

Identify the amount of net income for W Company under the perpetual inventory system.

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Chapter 5 Solutions

Financial And Managerial Accounting
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