Find your question
and Get expert's answers*
Homework Help
*Click here to submit
Refer a Friend
Discount up to 15%*
Prepared References
Save up to 50%*
Homework Help >> Accounting Basics
  Multiple-step income statement for administrative expenses

Aug.1) Purchased merchandise from Abilene Company for $6,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1.

Aug.4) At Abilene's request, Stone paid $220 cash for freight charges on the August 1 purchase, reducing the amount owed to Abilene.

Aug.5)    Sold merchandise to Lux Corp. for $4,200 under credit terms of 2/10, n/60, FOB destination, invoice dated August 5. The merchandise had cost $2,999.

Aug.8) Purchased merchandise from Welch Corporation for $5,300 under credit terms of 1/10, n/45, FOB shipping point, invoice dated August 8. The invoice showed that at Stone’s request, Welch paid the $240 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.)

 Aug.9) Paid $130 cash for shipping charges related to the August 5 sale to Lux Corp.

 Aug.10) Lux returned merchandise from the August 5 sale that had cost Stone $500 and been sold for $700. The merchandise was restored to inventory.

 Aug.12) After negotiations with Welch Corporation concerning problems with the merchandise purchased on August 8, Stone received a credit memorandum from Welch granting a price reduction of $800.

 Aug.15) Received balance due from Lux Corp. for the August 5 sale less the return on August 10.

 Aug.18) Paid the amount due Welch Corporation for the August 8 purchase less the price reduction granted.

Aug.19) Sold merchandise to Trax Co. for $3,600 under credit terms of 1/10, n/30, FOB shipping point, invoice dated August 19. The merchandise had cost $2,498.

 Aug.22) Trax requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Stone sent Trax a $600 credit memorandum to resolve the issue.

 Aug.29) Received Trax's cash payment for the amount due from the August 19 sale.

 Aug.30) Paid Abilene Company the amount due from the August 1 purchase.
  
Prepare the necessary journal entries for Stone Company, which is a merchandising company that uses the perpetual system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Abilene.)

[The following information applies to the questions displayed below.]
BizKid Company’s adjusted trial balance on August 31, 2011, its fiscal year-end, follows.
 
                                                                    Debit                              Credit     
  Merchandise inventory         $                  32,500                    
  Other (noninventory) assets                    130,000                    
  Total liabilities                                                                              $    37,538     
  Common stock                                                                                   65,383     
  Retained earnings                                                                             43,749     
  Dividends                                                 8,000                    
  Sales                                                                                                 222,300     
  Sales discounts                                       3,401                    
  Sales returns and allowances                 14,672                    
  Cost of goods sold                                  86,585                    
  Sales salaries expense                           30,455                    
  Rent expense—Selling space                 10,448                    
  Store supplies expense                           2,668                    
  Advertising expense                              18,896                    
  Office salaries expense                          27,788                    
  Rent expense—Office space                   2,668                    
  Office supplies expense                            889

  Totals                                                    $368,970                        $ 368,970   

On August 31, 2010, merchandise inventory was $26,228. Supplementary records of merchandising activities for the year ended August 31, 2011, reveal the following itemized costs.                  

  Invoice cost of merchandise purchases             $    95,550 
  Purchase discounts received                                     2,007 
  Purchase returns and allowances                             4,586 
  Costs of transportation-in                                         3,900 

Question1) Compute the company’s net sales for the year.

378_net sales.jpg
Question2) Compute the company’s total cost of merchandise purchased for the year

1342_total cost.jpg
Question3) Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.

1490_income statement.jpg

Question4) Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.

499_income statement_1.jpg




Answer

Multiple-step income statement for administrative expenses


Request for solution file

Course: Accounting Basics

Ref. No:- TGS0424

Like US:-
Assignment Help

Ask an Expert & Get Answer

  • Quality work delivery
  • 100% Plagiarism free
  • Time on delivery
  • Privacy of work
Order Now
More Accounting Basics Questions


Berry Co. purchases a patent on January 1, 2012, for $40,000 and the patent has an expected useful life of five years with no residual value. Assumi
Determine the best practice for conducting earned value analysis for the project in question. Give a rationale for your determination and one (1) sp
This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash. At Christmas, Samantha gave each of her three nephews Christmas
What is callable preferred stock? Why do corporations issue such stock? Given the various features which are associated with the stock (callable, cu
When a company sells the product for cash, it generally recognizes the revenue. But, there're situations when it isn't always clear when the company
Compute the amount of gain to be reported currently on the sale of the tugboat. Assume that Dan wants to use the instalment method if ti can be used
Bisson Furniture uses a process cost system to account for its chair factory. Beginning inventory consisted of 5,000 units (100% complete as to mate
The Braggs & Struttin' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper"
Peter needs to assess the risks at Top Notch T-Shirts. In order to do so he wants to visualize the general ordering, production and sales process in
Gross income from the property was $150,000 and net income before the percentage depletion deduction was $100,000. What is Carrie's tax preference f