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Periodic inventory accounts, multiple-step income statement, closing entries On December 31, 2019, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Cash $13,500 Accounts Receivable 72,000 Merchandise Inventory, January 1,2019 257,000 Estimated Returns Inventory 35,000 Office Supplies 3,000 Prepaid Insurance 4,500 Land 150,000 Store Equipment 270,000 Accumulated Depreciation—Store Equipment 55000 Office Equipment 78,500 Accumulated Depreciation—Office Equipment 16000 Accounts Payable 27,800 Customer Refunds Payable 50,000 Salaries Payable 3,000 Unearned Rent 8,300 Notes Payable 50,000 Shirley Wyman, Capital 515,600 Shirley Wyman, Drawing 25,000 Sales 3280000 Purchases 2650000 Purchases Returns and Allowances 93,000 Purchases Discounts 37,000 Freight In 48,000 Sales Salaries Expense 300,000 Advertising Expense 45,000 Delivery Expense 9,000 Depreciation Expense—Store Equipment 6,000 Miscellaneous Selling Expense 12,000 Office Salaries Expense 175,000 Rent Expense 28,000 Insurance Expense 3,000 Office Supplies Expense 2,000 Depreciation Expense-Office Equipment 1,500 Miscellaneous Administrative Expense 3,500 Rent Revenue 7,000 Interest Expense 2,000 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, 2019. The merchandise inventory as of December 31, 2019, was $305,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was $30,000. 3. Prepare the closing entries for Wyman Company as of December 31, 2019. 4. What would the net income have been if the perpetual inventory system had been used?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 6, Problem 6.9APR
Textbook Problem

Periodic inventory accounts, multiple-step income statement, closing entries

On December 31, 2019, the balances of the accounts appearing in the ledger of Wyman

Company are as follows:

Cash $13,500
Accounts Receivable 72,000
Merchandise Inventory, January 1,2019 257,000
Estimated Returns Inventory 35,000
Office Supplies 3,000
Prepaid Insurance 4,500
Land 150,000
Store Equipment 270,000
Accumulated Depreciation—Store Equipment 55000
Office Equipment 78,500
Accumulated Depreciation—Office Equipment 16000
Accounts Payable 27,800
Customer Refunds Payable 50,000
Salaries Payable 3,000
Unearned Rent 8,300
Notes Payable 50,000
Shirley Wyman, Capital 515,600
Shirley Wyman, Drawing 25,000
Sales 3280000
Purchases 2650000
Purchases Returns and Allowances 93,000
Purchases Discounts 37,000
Freight In 48,000
Sales Salaries Expense 300,000
Advertising Expense 45,000
Delivery Expense 9,000
Depreciation Expense—Store Equipment 6,000
Miscellaneous Selling Expense 12,000
Office Salaries Expense 175,000
Rent Expense 28,000
Insurance Expense 3,000
Office Supplies Expense 2,000
Depreciation Expense-Office Equipment 1,500
Miscellaneous Administrative Expense 3,500
Rent Revenue 7,000
Interest Expense 2,000

Instructions

  1. 1. Does Wyman Company use a periodic or perpetual inventory system? Explain.
  2. 2. Prepare a multiple-step income statement for Wyman Company for the year ended December 31, 2019. The merchandise inventory as of December 31, 2019, was $305,000. The adjustment for estimated returns inventory for sales for the year ending December 31, 2019, was $30,000.
  3. 3. Prepare the closing entries for Wyman Company as of December 31, 2019.
  4. 4. What would the net income have been if the perpetual inventory system had been used?

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Chapter 6 Solutions

Accounting
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