Response to the following :
Refer to the information in problem 1:
Required:
Prepare all closing entries. Include general ledger account numbers as shown in the chapter - for example, Purchases: 550. Include brief descriptions for each entry
Problem 1:
The following information is taken from the records of O'Donnell Corp. at June 30, 2016, its fiscal year-end:
Advertizing expense $ 1,500
Commissions expense 4,000
Delivery expense 1,000
Insurance expense 1,000
Opening inventory 6,000
Purchases 35,000
Purchase returns and allowances 2,000
Rent expense 2,500
Salaries expense 5,000
Sales (gross) 72,000
Sales returns and allowances 2,000
Transportation-in 1,000
The merchandize inventory at June 30, 2016 amounted to $10,000.
Required:
1. Prepare a classified income statement. Assume all expenses not related to cost of goods sold are selling expenses.
2. Compute gross profit percentage.