1 – The net sales would be $852,000 and the gross profit is $230,000. The cost of goods sold would be
the difference between the two. $622,000 is the cost of goods sold.
($852,000-$230,000=$622,000)
2 – (refer to general journal)
3 – Plant assets are assets with a useful life of more than one year and they are used in producing
revenues in a business’s operations. Depreciation is reported during their useful life. The first issue with
plant assets is computing the cost of plant assets. The second issue is allocating the costs of most plant
assets against revenues for the periods they benefit. The third issue is accounting for expenditures such
as repairs and improvements to the plant assets. The fourth issue is recording the disposal of plant
assets.
4 – (refer to general journal)
5 –