EXERCISE 5-6
(a) TSAI COMPANY
Income Statement (Partial)
For the Year Ended October 31, 2015
Sales
Sales revenue …………………………………………. $820,000
Note: Freight-out is a selling expense.
(b) (1) Oct. 31 Sales Revenue ……………………….. 820,000
(2) 31 Income Summary ……………………. 38,000
Sales Returns and
EXERCISE 5-7
(a) Cost of Goods Sold ………………………………………. 1,100
(b) Sales Revenue ……………………………………………… 115,000
Income Summary ………………………………………….. 93,000
Cost of Goods Sold ($60,000 + $1,100) …….. 61,100
EXERCISE 5-8
(a) Cost of Goods Sold ………………………………………. 600
(b) Sales Revenue ……………………………………………… 380,000
Income Summary ………………………………………….. 335,600
Cost of Goods Sold ($218,000 + $600) ……… 218,600
Freight-Out …………………………………………….. 7,000
Income Summary ($380,000 – $335,600) …………. 44,400
EXERCISE 5-9
(a) FURLOW COMPANY
Income Statement
For the Month Ended March 31, 2015
Sales
Sales revenue …………………………………………… $380,000
Less: Sales returns and allowances ………….. $13,000
Sales discounts ……………………………… 8,000 21,000
Net sales ………………………………………………….. 359,000
EXERCISE 5-10
(a) LEMERE COMPANY
Income Statement
For the Year Ended December 31, 2015
Net sales ………………………………………. $2,200,000
Cost of goods sold ……………………….. 1,289,000
Gross profit ………………………………….. 911,000
Operating expenses ……………………… 725,000
(b) LEMERE COMPANY
Income Statement
For the Year Ended December 31, 2015
Revenues
Net sales ………………………………………. $2,200,000
Interest revenue ……………………………. 28,000
Total revenues ……………………….. 2,228,000
Expenses
EXERCISE 5-11
1. Sales Returns and Allowances …………………………………. 195
2. Supplies ………………………………………………………………….. 180
3. Sales Discounts ………………………………………………………. 215
4. Inventory ………………………………………………………………… 20
EXERCISE 5-12
(a) $900,000 – $522,000 = $378,000.
(b) $378,000/$900,000 = 42%. The gross profit rate is generally considered to
be more useful than the gross profit amount. The rate expresses a more
(c) Income from operations is $153,000 ($378,000 – $225,000), and net income
(d) The amount shown for net income is the same in a multiple-step income
(e) Inventory is reported as a current asset immediately below accounts
receivable.
EXERCISE 5-13
(a) (*missing amount)
a. Sales revenue …………………………..………………………… $ 90,000)
b. Net sales ……………………………………………………………. $ 87,000)
c. Gross profit ………………………………………………………… $ 31,000)
d. *Sales revenue …………………………………………………….. $107,000)
e. Net sales ……………………………………………………………. $102,000)
f. Gross profit ………………………………………………………… $ 41,500)
)
(b) May Company
Reed Company
EXERCISE 5-14
(*Missing amount)
(a) Sales revenue …………………………..…………………… $ 90,000
(b) Net sales ………………………………………………………. $ 86,000
(c) and (d)
Gross profit ………………………………………………….. $ 30,000
(e) Sales revenue ……………………………………………….. $100,000*
(f) Net sales ………………………………………………………. $ 95,000
(g) and (h)
Gross profit ………………………………………………….. $ 38,000
Operating expenses (g) …………………………………. 20,000*
(i) Sales revenue …………………………..…………………… $122,000
(j) Net sales ………………………………………………………. $110,000
EXERCISE 5-14 (Continued)
(k) and (l)
Gross profit ………………………………………………….. $24,000
Operating expenses …………………………..………….. 18,000
*EXERCISE 5-15
Accounts
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Debit
Credit
Cash
Inventory
Sales Revenue
Sales Returns and Allowances
Sales Discounts
Cost of Goods Sold
11,000
76,000
10,000
9,000
300,000
480,000
10,000
9,000
300,000
11,000
76,000
*EXERCISE 5-16
MARQUEZ COMPANY
Worksheet
For the Month Ended June 30, 2015
Account Titles
Trial Balance
Adjustments
Adj. Trial
Balance
Income
Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash
1,920
1,920
1,920
Accounts Receivable
2,440
2,440
2,440
Inventory
11,640
11,640
11,640
Accounts Payable
1,120
1,500
2,620
2,620
Common Stock
3,500
3,500
3,500
Sales Revenue
42,500
42,500
42,500
Cost of Goods Sold
20,560
20,560
20,560
Operating Expenses
10,560
1,500
12,060
12,060
Totals
47,120
47,120
1,500
1,500
48,620
48,620
32,620
42,500
16,000
6,120
Net Income
9,880
9,880
Totals
42,500
42,500
16,000
16,000
*EXERCISE 5-17
Inventory, September 1, 2014 ………………………………… $17,200
Purchases ……………………………………………………………. $149,000
Less: Purchase returns and allowances ………………… 2,000
Net Purchases ……………………………………………………… 147,000
*EXERCISE 5-18
(a) Sales revenue ………………………………… $840,000
Less: Sales returns and allowances …. $ 10,000
Cost of goods sold
Inventory, January 1 ………………….. 50,000
Purchases ………………………………… $509,000
*EXERCISE 5-19
(a) $1,580 ($1,620 – $40)
(b) $1,690 ($1,580 + $110)
(c) $1,530 ($1,840 – $310)
(g) $6,500 ($290 + $6,210)
(h) $1,730 ($7,940 – $6,210)
(i) $8,940 ($1,000 + $7,940)
(d) $30 ($1,060 – $1,030)
(e) $250 ($1,280 – $1,030)
(f) $120 ($1,350 – $1,230)
(j) $6,200 ($49,530 – $43,330 from (I))
(k) $2,500 ($43,590 – $41,090)
(l) $43,330 ($41,090 + $2,240)
*EXERCISE 5-20
(a) 1. April 5 Purchases …………………………..……. 25,000
2. April 6 Freight-In………………………………….. 900
3. April 7 Equipment ………………………………… 30,000
4. April 8 Accounts Payable …………………….. 2,800
5. April 15 Accounts Payable
($25,000 – $2,800) ………………….. 22,200
Purchase Discounts
(b) May 4 Accounts Payable
*EXERCISE 5-21
(a) 1. April 5 Purchases ………………………………… 19,000
2. April 6 Freight-In ………………………………….. 800
3. April 7 Equipment ………………………………… 23,000
4. April 8 Accounts Payable ……………………… 4,000
5. April 15 Accounts Payable ……………………… 15,000
(b) May 4 Accounts Payable
*EXERCISE 5-22
Accounts
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Cash
Inventory
Purchases
Purchase Returns and
Allowances
Sales Revenue
Sales Returns and
Allowances
9,000
80,000
240,000
10,000
30,000
450,000
80,000
240,000
10,000
75,000
30,000
450,000
9,000
75,000