CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–10A (Continued)
2.
Sales $3,280,000
Cost of merchandise sold:
Merchandise inventory, January 1, 2016 $ 257,000
Purchases $2,650,000
December 31, 2016
Cost of merchandise sold 2,520,000
Gross profit $ 760,000
Expenses:
Selling expenses:
Office supplies expense 2,000
Depreciation expense—office equipment 1,500
Miscellaneous administrative expense 3,500
Total administrative expenses 213,000
Total operating expenses 585,000
WYMAN COMPANY
Income Statement
For the Year Ended December 31, 2016
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–10A (Concluded)
3. Merchandise Inventory 305,000
Sales 3,280,000
Purchases Returns and Allowances 93,000
Freight In 48,000
Sales Salaries Expense 300,000
Advertising Expense 45,000
Delivery Expense 9,000
Depreciation Expense—Store Equipment 6,000
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–1B
Mar. 1 Merchandise Inventory 43,035
Accounts Payable—Haas Co. 43,035
18 Merchandise Inventory 13,560
Accounts Payable—Fairhurst Company 13,560
18 Merchandise Inventory 140
Cash 140
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–2B
July 1 Accounts Receivable—Landscapes Co. 33,450
Sales 33,450
5 Cost of Merchandise Sold 10,000
Merchandise Inventory 10,000
8 Cash 120,960
Sales 112,000
Sales Tax Payable 8,960
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–2B (Concluded)
July 16 Customer Refunds Payable 2,970
Accounts Receivable—Loeb Co. 2,970
[$3,000 – ($3,000 × 1%)]
16 Merchandise Inventory 1,800
Estimated Returns Inventory 1,800
18 Accounts Receivable—Jennings Company 11,123
Sales 11,123
[$11,350 – ($11,350 × 2%)]
18 Accounts Receivable—Jennings Company 475
Cash 475
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–3B
July 3 Merchandise Inventory 61,426
Accounts Payable—Hamling Co. 61,426
Merchandise Inventory 6,713
[$6,850 – ($6,850 × 2%)]
13 Accounts Payable—Hamling Co. 61,426
Cash 61,426
15 Accounts Payable—Kester Co. 26,068
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–3B (Concluded)
July 23 Cash 91,200
Sales 91,200
23 Cost of Merchandise Sold 55,000
Merchandise Inventory 55,000
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–4B
1.
Apr. 2 Accounts Receivable—Bird Company 31,360
Sales 31,360
[$32,000 – ($32,000 × 2%)]
2 Accounts Receivable—Bird Company 330
Cash 330
Sales 49,005
[$49,500 – ($49,500 × 1%)]
8 Cost of Merchandise Sold 29,700
Merchandise Inventory 29,700
8 Delivery Expense 710
Cash 710
12 Cash ($31,360 + $330) 31,690
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–4B (Concluded)
2.
Apr. 2 Merchandise Inventory ($31,360 + $330) 31,690
Accounts Payable—Swan Company 31,690
8 Merchandise Inventory 49,005
Accounts Payable—Swan Company 49,005
[$49,500 – ($49,500 × 1%)]
12 Accounts Payable—Swan Company 31,690
Cash 31,690
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B
1.
Sales $8,925,000
Cost of merchandise sold 5,620,000
Gross profit $3,305,000
Expenses:
Selling expenses:
Sales salaries expense $850,000
Advertising expense 420,000
Depreciation expense—store
KANPUR CO.
Income Statement
For the Year Ended June 30, 2016
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Continued)
2.
Retained earnings, July 1, 2015 $ 381,000
Net income for the year $1,340,000
KANPUR CO.
Retained Earnings Statement
For the Year Ended June 30, 2016
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Continued)
3.
Store equipment $650,000
Less accumulated depreciation 87,500 562,500
Total property, plant, and equipment 724,500
Total assets $1,663,500
Liabilities
KANPUR CO.
Balance Sheet
June 30, 2016
Assets
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–5B (Concluded)
4. a. The multiple-step form of income statement contains various sections for
revenues and expenses, with intermediate balances, and concludes with
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B
1.
Sales $8,925,000
Expenses:
Cost of merchandise sold $5,620,000
2.
Retained earnings, July 1, 2015 $ 381,000
KANPUR CO.
Retained Earnings Statement
For the Year Ended June 30, 2016
KANPUR CO.
Income Statement
For the Year Ended June 30, 2016
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B (Continued)
3.
Current assets: Current liabilities:
Cash $ 92,000 Accounts payable $ 48,500
Accounts receivable 450,000 Salaries payable 4,000
Merchandise inventory 375,000 Notes payable (current portion) 7,000
KANPUR CO.
Balance Sheet
June 30, 2016
Assets Liabilities
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–6B (Concluded)
4.
2016
June 30 Sales 8,925,000
Income Summary 8,925,000
30 Income Summary 7,585,000
Cost of Merchandise Sold 5,620,000
Sales Salaries Expense 850,000
Advertising Expense 420,000
Closing Entries
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–7B
Mar. 1 Purchases 43,250
Freight In 650
18 Purchases 13,560
Accounts Payable—Fairhurst Company 13,560
18 Freight In 140
Cash 140
19 Purchases 6,500
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–8B
July 3 Purchases 61,200
Freight In 1,450
Purchases Discounts 1,224
15 Accounts Payable—Kester Co. 26,600
Cash 26,068
Purchases Discounts 532
21 Cash 36,000
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–9B
1.
Apr. 2 Accounts Receivable—Bird Company 31,360
Sales 31,360
[$32,000 – ($32,000 × 2%)]
2 Accounts Receivable—Bird Company 330
Cash 330
8 Accounts Receivable—Bird Company 49,005
Sales 49,005
[$49,500 – ($49,500 × 1%)]
CHAPTER 5 Accounting for Merchandising Businesses
Prob. 5–9B (Concluded)
2.
Apr. 2 Purchases 32,000
Freight In 330
Accounts Payable—Swan Company 32,330
8 Purchases 49,500
Accounts Payable—Swan Company 49,500
12 Accounts Payable—Swan Company 32,330
Cash 31,690
Purchases Discounts 640