PROBLEM 5-1B
(a)
General Journal
Date
Account Titles
Debit
Credit
Apr. 2
Inventory ……………………………………………………
Accounts Payable ………………………………..
8,700
8,700
Cost of Goods Sold …………………………………….
Inventory ……………………………………………..
3,700
3,700
5
Freight-Out …………………………………………………
Cash ……………………………………………………
200
200
6
Accounts Payable ………………………………………
Inventory ……………………………………………..
400
400
Inventory ($8,300 X 2%) ………………………..
14
Inventory ……………………………………………………
Cash ……………………………………………………
4,700
4,700
16
Cash ……………………………………………………….….
Inventory ……………………………………………..
500
500
18
Inventory ……………………………………………………
20
Inventory ……………………………………………………
Cash ……………………………………………………
PROBLEM 5-1B (Continued)
General Journal
Account Titles
Debit
Credit
Cost of Goods Sold …………………………………….
Inventory ……………………………………………..
5,580
Cash ……………………………………………………….
Sales Revenue ……………………………………..
8,300
8,300
Accounts Payable ……………………………………….
Cash ……………………………………………………
Inventory ($5,500 X 2%) ………………………..
5,500
5,390
110
Accounts Receivable …………………………………..
Sales Revenue ……………………………………..
Sales Returns and Allowances …………………….
Cash ……………………………………………………
180
180
PROBLEM 5-1B (Continued)
(b)
Cash
4/30 Bal. 3,596
4/30 3,980
4/30 Bal. 18,280
4/29 180
4/30 Bal. 180
4/1 Bal. 10,000
4/13 5,880
4/5 200
4/11 8,134
Accounts Receivable
4/4 6,000
4/30 3,980
4/13 6,000
4/30 Bal. 3,980
4/2 8,700
4/4 3,700
4/30 Bal. 8,544
4/4 3,700
4/23 5,580
4/29 120
4/30 Bal. 11,660
4/5 200
4/30 Bal. 200
Accounts Payable
4/6 400
4/11 8,300
4/27 5,500
4/2 8,700
4/18 5,500
4/30 Bal. 0
4/1 Bal. 10,000
4/30 Bal. 10,000
Sales Revenue
4/4 6,000
4/23 8,300
Sales Discounts
4/13 120
4/30 Bal. 120
PROBLEM 5-1B (Continued)
(c) KREY DISTRIBUTING COMPANY
Income Statement (Partial)
For the Month Ended April 30, 2014
Sales
Sales revenue …………………………………………….. $18,280
Less: Sales returns and allowances ……………. $180
PROBLEM 5-2B
April 1 Inventory (190 X $6) ……………………………………… 1,140
Accounts Payable …………………………………. 1,140
3 Accounts Receivable (40 X $10) ……………………. 400
Sales Revenue ………………………………………. 400
12 Cash ……………………………………………………………. 388
Sales Discounts ($400 X .03) ………………………… 12
Accounts Receivable …………………………….. 400
13 Accounts Receivable (25 X $12) ……………………. 300
Sales Revenue ………………………………………. 300
Cost of Goods Sold (25 X $6) ………………………… 150
Inventory ………………………………………………. 150
20 Inventory (200 X $6) ……………………………………… 1,200
PROBLEM 5-3B
(a)
General Journal
Date
Account Titles
Debit
Credit
Apr. 4
Inventory ……………………………………………………
Accounts Payable ………………………………..
980
980
6
Inventory ……………………………………………………
Cash ……………………………………………………
Cost of Goods Sold …………………………………….
Inventory …………………………………………….
480
480
10
Accounts Payable ………………………………………
Inventory …………………………………………….
130
130
11
Inventory ……………………………………………………
Cash ……………………………………………………
300
300
13
Accounts Payable ($980 – $130) ………………….
Cash ……………………………………………………
Inventory ($850 X 2%) ………………………….
850
833
17
14
Inventory ……………………………………………………
Accounts Payable ………………………………..
1,300
1,300
15
Cash ………………………………………………………….
Inventory …………………………………………….
17
Inventory ……………………………………………………
Cash ……………………………………………………
Cost of Goods Sold …………………………………….
Inventory …………………………………………….
440
440
PROBLEM 5-3B (Continued)
Date
Account Titles
Debit
Credit
Apr. 20
Cash ……………………………………………………….
Accounts Receivable …………………………..
500
500
21
Accounts Receivable …………………………..
Accounts Receivable …………………………..
Accounts Payable ………………………………………
1,300
(b)
Cash
4/21 1,261
4/30 Bal. 2,086
4/30 Bal. 0
4/1 Bal. 3,500
4/15 50
4/6 60
4/11 300
Accounts Receivable
4/8 750
4/18 660
4/20 500
4/27 30
4/30 550
4/30 Bal. 330
4/11 300
4/15 50
4/30 Bal. 3,244
4/27 30
4/30 Bal. 30
Accounts Payable
4/10 130
4/13 850
4/4 980
4/14 1,300
Common Stock
4/1 Bal. 5,200
4/30 Bal. 5,200
Sales Revenue
4/8 750
4/18 660
4/30 Bal. 1,410
PROBLEM 5-3B (Continued)
Cost of Goods Sold
4/30 Bal. 920
4/8 480
(c) CONNORS’ TENNIS SHOP
Trial Balance
April 30, 2014
Debit
Credit
Cost of Goods Sold …………………………………………
$6,610
Cash ……………………………………………………………….
Accounts Receivable ………………………………………
$2,086
330
(d) CONNORS’ TENNIS SHOP
Income Statement (Partial)
For the Month Ended April 30, 2014
Sales
Sales revenues …………………………………………………………. $1,410
Less: Sales returns and allowances ………………………….. 30
PROBLEM 5-4B
(a) PARKER DEPARTMENT STORE
Income Statement
For the Year Ended December 31, 2014
Sales
Sales revenue …………………………………. $626,000
Less: Sales returns and
allowances …………………………... 8,000
Net sales ……………………………………………….. 618,000
Utilities expense …………………………….. 11,000
Insurance expense …………………………. 8,400
Maintenance and repairs expense …… 6,200
Total operating expenses …………. 160,000
Income from operations …………………………. 46,000
Other revenues and gains
PARKER DEPARTMENT STORE
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained earnings, January 1 ………………………………………………….. $19,200
Add: Net income …………………………………………………………………… 28,300
PROBLEM 5-4B (Continued)
PARKER DEPARTMENT STORE
Balance Sheet
December 31, 2014
Assets
Current assets
Cash …………………………………………… $ 30,000
Accounts receivable ……………………. 43,500
Property, plant, and equipment
Land …………………………………………… 50,000
Buildings …………………………………….. $140,000
Less: Accumulated depreciation—
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable …………………………………………. $ 73,300
Mortgage payable ………………………………………….. 20,000
PROBLEM 5-4B (Continued)
(b) Profit margin: $28,300 ÷ $618,000 = 4.6%
(c) Revised net income = Current net income + increase in gross profit –
increase in operating expenses
$51,000 = $28,300 + $50,500 – $27,800