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PROBLEM 5-1B
(a)
General Journal
Date
Account Titles
Debit
Credit
Apr. 2
Inventory ............................................................
Accounts Payable ......................................
8,700
8,700
5
Freight-Out .........................................................
Cash ............................................................
200
200
6
Accounts Payable .............................................
Inventory .....................................................
400
400
14
Inventory ............................................................
Cash ............................................................
4,700
4,700
16
Cash ....................................................................
Inventory .....................................................
500
500
PROBLEM 5-1B (Continued)
General Journal
Date
Account Titles
Debit
Credit
Apr. 23
Cash ................................................................
Sales Revenue ............................................
8,300
8,300
27
Accounts Payable ..............................................
Cash ............................................................
Inventory ($5,500 X 2%) .............................
5,500
5,390
110
29
Sales Returns and Allowances .........................
Cash ............................................................
180
180
PROBLEM 5-1B (Continued)
(b)
Cash
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
Accounts Payable
4/6 400
4/11 8,300
4/27 5,500
4/2 8,700
4/18 5,500
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
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
PROBLEM 5-3B (Continued)
Date
Account Titles
Debit
Credit
Apr. 20
Cash ................................................................
Accounts Receivable ................................
500
500
21
Accounts Payable .............................................
1,300
(b)
Cash
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
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
4/8 480
(c) CONNORS’ TENNIS SHOP
Trial Balance
April 30, 2014
Debit
Credit
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
