Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
EXERCISE 5-6
(a) SANG COMPANY
Income Statement (Partial)
For the Year Ended October 31, 2017
Sales revenues
Sales revenue ................................................. $820,000
(b) (1) Oct. 31 Sales Revenue ............................. 820,000
Income Summary ................. 820,000
EXERCISE 5-7
(a) Cost of Goods Sold .............................................. 1,400
Inventory ........................................................ 1,400
Income Summary .................................................. 93,300
Cost of Goods Sold ($60,000 + $1,400) ........ 61,400
Operating Expenses ..................................... 29,000
EXERCISE 5-8
(a) Cost of Goods Sold .............................................. 600
(b) Sales Revenue ...................................................... 380,000
Income Summary .......................................... 380,000
Income Summary .................................................. 335,600
Cost of Goods Sold ($218,000 + $600) ......... 218,600
Freight-Out ..................................................... 7,000
EXERCISE 5-9
(a) KAILA COMPANY
Income Statement
For the Month Ended March 31, 2017
Sales revenues
Sales revenue ................................................... $380,000
Less: Sales returns and allowances .............. $13,000
Sales discounts .................................... 8,000 21,000
Operating expenses
Salaries and wages expense ........................... 58,000
Rent expense .................................................... 30,000
EXERCISE 5-10
(a) ANHAD COMPANY
Income Statement
For the Year Ended December 31, 2017
Net sales .............................................. $2,200,000
Cost of goods sold ............................. 1,289,000
Gross profit ......................................... 911,000
Operating expenses ........................... 725,000
(b) ANHAD COMPANY
Income Statement
For the Year Ended December 31, 2017
Revenues
Net sales .............................................. $2,200,000
Interest revenue .................................. 28,000
EXERCISE 5-11
1. Sales Returns and Allowances ........................................ 210
Sales Revenue ........................................................... 210
3. Sales Discounts ................................................................ 215
Sales Revenue ........................................................... 215
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
meaningful (qualitative) relationship between net sales and gross profit.
The gross profit rate tells how many cents of each sales dollar go to
(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
EXERCISE 5-13
(a) (*missing amount)
a. Sales revenue .............................................................. $ 92,000)
b. Net sales ...................................................................... $ 87,000)
c. Gross profit .................................................................. $ 31,000)
Operating expenses .................................................... (15,000)
*Net income ................................................................... $ 16,000)
e. Net sales ...................................................................... $102,000)
)
(b) Summer Company
Gross profit ÷ Net sales = $31,000 ÷ $87,000 = 35.6%
EXERCISE 5-14
(*Missing amount)
(a) Sales revenue ........................................................ $ 90,000
Sales returns and allowances .............................. 4,000*
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
Sales returns and allowances .............................. 12,000
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
Credit
Debit
Credit
Cash
Inventory
11,000
76,000
11,000
76,000
*EXERCISE 5-16
BALISTRERI COMPANY
Worksheet
For the Month Ended June 30, 2017
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
*EXERCISE 5-17
Inventory, September 1, 2016 ....................................... $19,500
Purchases ...................................................................... $149,000
Less: Purchase returns and allowances ..................... 2,000
*EXERCISE 5-18
(a) Sales revenue ....................................... $840,000
Less: Sales returns and allowances .... $ 10,000
Sales discounts ......................... 5,000 15,000
Net sales ............................................... 825,000
Cost of goods sold
Inventory, January 1 ....................... 50,000
Purchases ....................................... $509,000
(b) Gross profit $330,000 – Operating expenses = Net income $130,000.
*EXERCISE 5-19
(a) $1,580 ($1,620 – $40)
(b) $1,690 ($1,580 + $110)
(g) $6,500 ($290 + $6,210)
(h) $1,730 ($7,940 – $6,210)
*EXERCISE 5-20
(a) 1. April 5 Purchases ....................................... 25,000
Accounts Payable ..................... 25,000
4. April 8 Accounts Payable .......................... 2,800
Purchase Returns and
Allowances ............................ 2,800
*EXERCISE 5-21
(a) 1. April 5 Purchases ....................................... 21,000
Accounts Payable ..................... 21,000
2. April 6 Freight-in ......................................... 800
Cash ........................................... 800
5. April 15 Accounts Payable ........................... 17,000
($21,000 – $4,000)
Purchase Discounts
[($21,000 – $4,000) X 2%)] ..... 340
Cash ($17,000 – $340) ............... 16,660
*EXERCISE 5-22
Accounts
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Cash
Inventory
Purchases
Purchase Returns and
9,000
80,000
240,000
80,000
240,000
75,000
9,000
75,000
PROBLEM 5-1A
(a) June 1 Inventory ...................................................... 1,600
Accounts Payable ............................... 1,600
3 Accounts Receivable .................................. 2,500
Sales Revenue ..................................... 2,500
9 Accounts Payable ($1,600 – $100) ............. 1,500
Inventory
15 Cash ............................................................. 2,500
Accounts Receivable .......................... 2,500
17 Accounts Receivable .................................. 1,800
Sales Revenue ..................................... 1,800
20 Inventory ...................................................... 1,800
Accounts Payable ............................... 1,800
26 Accounts Payable ....................................... 1,800
Inventory
($1,800 X .02) .................................... 36
Cash ..................................................... 1,764
PROBLEM 5-1A (Continued)
June 28 Accounts Receivable .................................. 1,600
Sales Revenue ..................................... 1,600
PROBLEM 5-2A
(a)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 1
Inventory ..........................................
Accounts Payable ....................
120
201
4,200
4,200
2
Accounts Receivable .......................
Sales Revenue ..........................
112
401
2,100
2,100
9
Cash ($2,100 – $21) ..........................
Sales Discounts ($2,100 X 1%) .......
Accounts Receivable ...............
101
414
112
2,079
21
2,100
11
Supplies ............................................
Cash ..........................................
126
101
400
400
17
Inventory ..........................................
Accounts Payable ....................
120
201
1,300
1,300
PROBLEM 5-2A (Continued)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 24
Cash ....................................................
Sales Revenue ............................
101
401
3,200
3,200
25
Inventory .............................................
Accounts Payable .......................
120
201
620
620
29
Sales Returns and Allowances ..........
Cash .............................................
412
101
70
70
31
Accounts Receivable .........................
Sales Revenue ............................
112
401
1,000
1,000
PROBLEM 5-2A (Continued)
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
9
10
Balance
J1
J1
2,079
3,822
5,000
7,079
3,257
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Inventory No. 120
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
2
12
15
J1
J1
J1
J1
4,200
1,400
1,300
150
4,200
2,900
3,922
3,772
PROBLEM 5-2A (Continued)
Supplies No. 126
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
J1
4,200
4,200
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
Balance
5,000
Sales Revenue No. 401
Date
Explanation
Ref.
Debit
Credit
Balance
Sales Returns and Allowances No. 412
Date
Explanation
Ref.
Debit
Credit
Balance
May 29
J1
70
70
Sales Discounts No. 414
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 5-2A (Continued)
Cost of Goods Sold No. 505
Date
Explanation
Ref.
Debit
Credit
Balance
May 2
J1
1,300
1,300
(c) RENNER HARDWARE STORE
Income Statement (Partial)
For the Month Ended May 31, 2017
Sales revenues
Sales revenue ..................................................... $6,300
PROBLEM 5-3A
(a) BIG BOX STORE
Income Statement
For the Year Ended November 30, 2017
Sales revenues
Sales revenue .................................... $720,000
Less: Sales returns & allowances ... 8,000
Net sales ............................................. 712,000
Cost of goods sold ................................... 518,000
Gross profit ............................................... 194,000
Operating expenses
Utilities expense ......................... 8,500
Insurance expense ..................... 7,000
Other revenues and gains
Interest revenue ................................. 2,000
PROBLEM 5-3A (Continued)
BIG BOX STORE
Owner’s Equity Statement
For the Year Ended November 30, 2017
Owner’s Capital, December 1, 2016 ............................................... $101,700
Add: Net income ............................................................................ 32,100
BIG BOX STORE
Balance Sheet
November 30, 2017
Assets
Current assets
Cash ................................................... $ 26,000
Property, plant, and equipment
PROBLEM 5-3A (Continued)
BIG BOX STORE
Balance Sheet (Continued)
November 30, 2017
Liabilities and Owner’s Equity
Current liabilities
Accounts payable ...................................................... $25,200
Long-term liabilities
Notes payable ............................................................ 37,000
Total liabilities .................................................... 69,200
(b) Nov. 30 Depreciation Expense .............................. 11,000
Accumulated Depreciation—
Equipment ..................................... 11,000
