1.
$433,912
$ 81,222
201,025
$107,550
$ 26,500
14,400
Net sales:
Cost of goods sold:
Rent expense
Dence’s Gourmet Shop
Sales
Selling expenses:
Operating expenses:
P4. Merchandising Income Statement: Periodic Inventory System
For the Year Ended March 31, 2014
Net cost of purchases
Merchandise inventory, March 31, 2013
Income Statement
Office salaries expense
Store salaries expense
General and administrative expenses:
6-19
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2.
This question is meant to get the students thinking about how to analyze financial
P4. Merchandising Income Statement: Periodic Inventory System (Concluded)
6-20
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1.
7 3,000
8 6,000
9 254
14 2,400
14 600
17 3,000
19 1,800
20 9,600
Company for purchase of March 10
Accounts Payable
P5. Merchandising Transactions: Periodic Inventory System
Made payment on account to Rourke’s
Received check from James William
Sold merchandise for cash
Cash
Returned damaged merchandise to
Leverage Company for credit
Sold merchandise to Deepak Soni,
Accounts Payable
terms n/30, FOB shipping point
Accounts Receivable
Purchased merchandise from Rourke
Accounts Receivable
Sold merchandise to James William,
2014
terms n/30, FOB shipping point
Mar.
Freight-In
Purchases
Purchased merchandise from Leverage
Company, terms n/30, FOB shipping point
Company, terms n/30, FOB shipping point;
Rourke Company paid freight
Cash
6-21
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21 5,400
24 200
2.
P5. Merchandising Transactions: Periodic Inventory System (Concluded)
2014
Made payment on account to Leverage
Company for purchase of March 8, net of
Mar.
Accepted return from Deepak Soni
Accounts Payable
Net sales reflects gross sales adjusted for any sales discounts, sales returns, or allow-
return on March 14
Sales Returns and Allowances
6-22
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1. 2014
Oct. 7 12,000
7 7,200
8 24,000
9 1,016
Purchased merchandise from Surf Company,
To transfer cost of merchandise sold to
Cost of Goods Sold account
terms n/30, FOB shipping point
Freight-In
Merchandise Inventory
Cost of Goods Sold
P6. Merchandising Transactions: Perpetual Inventory System
Accounts Receivable
FOB shipping point
Sold merchandise to Mel Forde, terms n/30,
Sold merchandise for cash
6-23
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P6. Merchandising Transactions: Perpetual Inventory System (Concluded)
2014
6-24
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1.
2014 %* 2013 %*
$1,051,864 100.0% $950,528 100.0%
expenses 125,732 12.0% 84,172 8.9%
2.
Alternate Problems
General and administrative
*Rounded
P7. Forms of the Income Statement
Net sales
Sigma Company
Income Statements
For the Years Ended April 30, 2014 and 2013
sold and the company’s overhead (general and administrative expenses).
Income from operations decreased from 2013 to 2014 in absolute amount by $88,404
($221,256 – $132,852) and decreased in percentage from 23.3 percent to 12.6 percent
6-25
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1.
$867,824
22,500
For the Year Ended August 31, 2014
Sales
Net sales:
Less sales returns and allowances
P8. Merchandising Income Statement: Perpetual Inventory System
Keystone Furniture
Income Statement
6-26
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2.
P8. Merchandising Income Statement: Perpetual Inventory System (Concluded)
This question is meant to link the income statements in this chapter to the financial
First, overall, the statement shows net income of $10,522, which was earned on net
Second, the components of gross margin and operating expenses can be examined.
Third, the net income can be compared with the total assets of the business to com-
6-27
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1.
1 4,200
1 2,520
3 7,600
5 580
2,400
1,440
2,000
1,200
P9. Merchandising Transactions: Perpetual Inventory System
Sold merchandise for cash
Sold merchandise to Lina Lopez, terms n/30,
Merchandise Inventory
To transfer cost of merchandise sold to Cost
of Goods Sold account
Sales
To transfer cost of merchandise sold to Cost
Merchandise Inventory
FOB shipping point
To transfer cost of merchandise sold to Cost
of Goods Sold account
Cost of Goods Sold
2014
Freight-In
Purchased merchandise from Ruff Company,
Merchandise Inventory
July
terms n/30, FOB shipping point
FOB shipping point
Accounts Receivable
Sales
Sold merchandise to Peter Watts, terms n/30,
of Goods Sold account
6-28
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