331
Problem 5-5A (Concluded)
Part 3 Single–step income statement
NELSON COMPANY
Income Statement
For Year Ended January 31, 2017
Net sales ………………………………………………………. $107,750
Expenses
Part 4
Current assets
Cash …………………………………………………………………..
$ 1,000
Merchandise inventory ………………………………………..
10,900
Store supplies …………………………………………………….
Prepaid insurance ……………………………………………….
$ 1,000
Cost of goods sold ………………
40,000
0
1,525
1,525
Salaries expense …………………
35,000
Insurance expense ………………
0
1,400
1,400
Rent expense ………………………
15,000
Store supplies expense ……….
0
4,050
4,050
Advertising expense ……………
______
______
______
______
Totals ………………………………….
Problem 5-6AB (50 minutes)
NELSON COMPANY
Work Sheet
For Year Ended January 31, 2017
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance Sheet
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash ……………………………………
1,000
1,000
1,000
Merchandise inventory ………..
Store supplies……………………..
5,800
1,750
1,750
Prepaid insurance ……………….
2,400
1,000
1,000
Store equipment ………………….
Accounts payable ……………….
J. Nelson, Capital ………………..
Sales …………………………………..
111,950
111,950
111,950
Sales discounts …………………..
2,000
2,000
2,000
Sales returns & allowances …
2,200
2,200
2,200
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 5
333
PROBLEM SET B
Problem 5-1B (40 minutes)—Perpetual & Gross Method
May 2 Merchandise Inventory ………………………………. 10,000
Accounts Payable—Havel ……………………. 10,000
Purchased goods, terms 1/15, n/30.
9 Cost of Goods Sold ……………………………………. 2,000
Merchandise Inventory ………………………… 2,000
Record cost of May 9 sale.
334
Problem 5-1B (Concluded)
May 17 Accounts Payable—Havel …………………………. 10,000
Merchandise Inventory* ………………………. 100
25 Accounts Payable—Duke ………………………….. 3,000
335
Problem 5-2B (40 minutes)—Perpetual and Gross Method
July 3 Merchandise Inventory ……………………………… 15,000
Accounts Payable—OLB …………………….. 15,000
Problem 5-2B (Concluded)
July 17 Cash …………………………………………………………. 9,310
Sales Discounts* ………………………………………. 190
Accounts Receivable—Brill ………………… 9,500
24 Sales Returns and Allowances ………………….. 1,000
Accounts Receivable—Brown …………….. 1,000
Issued credit memo for allowance.
Purchases discounts received ………………………………..
Purchases returns and allowances ………………………….
Costs of transportation–in ……………………………………….
Total cost of merchandise purchases ……………………..
$134,600
Problem 5-3B (40 minutes)
1.
Net sales
Sales …………………………..………………………………………….
$332,650
Sales returns and allowances ………………………..
2.
Cost of merchandise purchased
Invoice cost of merchandise purchases …………………..
$138,500
Problem 5-3B (Continued)
3. Multiple-step income statement
BARKLEY COMPANY
Income Statement
For Year Ended March 31, 2017
Sales ………………………………………………………….. $332,650
General and administrative expenses
Office salaries expense …………………………... 40,750
Rent expense—Office space …………………… 3,800
339
Problem 5-3B (Concluded)
4. Single-step income statement
BARKLEY COMPANY
Income Statement
For Year Ended March 31, 2017
Net sales ………………………………………………………. $306,775
Problem 5-4B (30 minutes)
Part 1
Closing entries
March 31 Sales ………………………………………………………… 332,650
Income Summary …………………………………… 332,650
March 31 Income Summary ……………………………………….. 55,175
C. Barkley, Capital …………………………………. 55,175
341
Problem 5-5B (60 Minutes)
Part 1
Adjustment (a)
Oct. 31 Store Supplies Expense …………………………….. 6,000
Store Supplies …………………………………….. 6,000
342
Problem 5-5B (Continued)
Part 2 Multiple-step income statement
FOSTER PRODUCTS COMPANY
Income Statement
For Year Ended October 31, 2017
Sales ………………………………………………………………. $227,100
Total selling expenses …………………………………. 71,300
General and administrative expenses
Insurance expense ………………………………………. 2,800
Part 3 Single–step income statement
FOSTER PRODUCTS COMPANY
Income Statement
For Year Ended October 31, 2017
Net sales …………………………………………………………. $221,100
343
Problem 5-5B (Concluded)
Part 4
Current assets
Cash ………………………………………………………………… $ 7,400
Merchandise inventory …………………………………….. 21,300
Problem 5-6BB (50 minutes)
FOSTER PRODUCTS COMPANY
Work Sheet
For Year Ended October 31, 2017
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance Sheet
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash …………………………………….
7,400
7,400
7,400
Merchandise inventory …………
Store supplies ………………………
9,700
3,700
3,700
Prepaid insurance ………………..
6,600
3,800
3,800
Store equipment …………………..
Accounts payable ………………..
D. Foster, Capital ………………….
D. Foster, Withdrawals …………
2,000
2,000
2,000
Sales discounts ……………………
1,000
1,000
1,000
Sales returns and allowances
5,000
5,000
5,000
Cost of goods sold ……………….
78,500
3,000
3,000
Salaries expense ………………….
63,000
Insurance expense ……………….
2,800
2,800
Rent expense ……………………….
26,000
Store supplies expense ………..
6,000
6,000
Totals …………………………………..
Totals …………………………………..
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 5
SERIAL PROBLEM — SP 5
Serial Problem — SP 5, Business Solutions (120 minutes) Part 1
Journal entries
Jan. 4 Wages Expense ……………………………………….623 125
11 Accounts Receivable—Alex’s Eng. Co …………106.1 5,500
Unearned Computer Services Revenue ……….236 1,500
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 5
Serial Problem — SP 5 (Continued)
Jan. 17 Accounts Payable ……………………………………201 5,800
22 Cash ………………………………………………………..101 4,653
26 Accounts Receivable—KC, Inc ………………….106.8 5,800
Serial Problem — SP 5 (Continued)
3 Accounts Payable ……………………………………201 8,504
5 Advertising Expense ………………………………..655 600
11 Cash ………………………………………………………..101 5,500
Accounts Receivable—Alex’s Eng. Co. ……106.1 5,500
Collected accounts receivable.
15 S. Rey, Withdrawals ………………………………….302 4,800
Paid employee.
27 Mileage Expense ……………………………………..676 192
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 5
Serial Problem — SP 5 (Continued)
Mar. 8 Computer Supplies ………………………………….126 2,730
16 Cash ………………………………………………………..101 5,260
Computer Services Revenue ……………..403 5,260
Collected cash revenue from customer.
30 Accounts Receivable—IFM Co. …………………106.4 2,220
Sales …………………………………………………413 2,220
Sold merchandise on credit.
30 Cost of Goods Sold ………………………………….502 1,048