Cost of merchandise sold and related items The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2016: Merchandise inventory. May 1, 2015 $ 380,000 Merchandise inventory, April 30,2016 415,000 Purchases 3,800,000 Purchases returns and allowances 150,000 Purchases discounts 80,000 Sales 5,850,000 Freight in 16,600 a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2016, using the periodic inventory system. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2016. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory' system?

BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307
BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307

Solutions

Chapter
Section
Chapter 5, Problem 5.35EX
Textbook Problem

Cost of merchandise sold and related items

The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2016:

Merchandise inventory. May 1, 2015 $ 380,000
Merchandise inventory, April 30,2016 415,000
Purchases 3,800,000
Purchases returns and allowances 150,000
Purchases discounts 80,000
Sales 5,850,000
Freight in 16,600
  1. a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2016, using the periodic inventory system.
  2. b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2016.
  3. c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory' system?

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Chapter 5 Solutions

Financial & Managerial Accounting
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Halibut Company purchased...Ch. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Sales transactions Journalize the following...Ch. 5 - Sales transactions Journalize the following...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Transactions for buyer and seller Sather Co. sold...Ch. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Inventory shrinkage Castle Furnishings Company's...Ch. 5 - Inventory shrinkage Hahn Flooring Company's...Ch. 5 - Ratio of safes to assets Financial statement data...Ch. 5 - Ratio of sales to assets Financial statement data...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of merchandise sold For a recent...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Warwick's Co., a...Ch. 5 - Purchase-related transactions Journalize entries...Ch. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer returns and allowances Zell Company had...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Sales-related transactions Merchandise is sold on...Ch. 5 - Determining amounts to be paid on invoices...Ch. 5 - Sales-related transactions Showcase Co., a...Ch. 5 - Purchase-related transactions Based on the data...Ch. 5 - chart of accounts Monet Paints Co. is a newly...Ch. 5 - Sales tax A sale of merchandise on account for...Ch. 5 - Sales tax transactions Journalize the entries to...Ch. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser a....Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On October 31,...Ch. 5 - Multiple-step income statement Identify the errors...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Adjusting entry for merchandise inventory...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, 2016, the balances of...Ch. 5 - Ratio of sales to assets The Home Depot reported...Ch. 5 - Ratio of sales to assets Kroger, a national...Ch. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Cost of merchandise sold and related items The...Ch. 5 - Cost of merchandise sold Based on the following...Ch. 5 - Cost of merchandise sold Based on the following...Ch. 5 - Cost of merchandise sold Identify the errors in...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple step income statement and report form of...Ch. 5 - Single-step income statement and account form of...Ch. 5 - Appendix Purchase-related transactions using...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and report form of...Ch. 5 - Single-step income statement and account form of...Ch. 5 - Appendix Purchase-related transactions using...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Continuing problem Palisade Creek Co. is a...Ch. 5 - Ethics and professional conduct in business On...Ch. 5 - Purchases discounts and accounts payable Rustic...Ch. 5 - Determining cost of purchase The following is an...Ch. 5 - Sales discounts Your sister operates Watercraft...

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