PROBLEM 5-6B (Continued)
(c) BUSE’S FASHION CENTER
Adjusted Trial Balance
November 30, 2014
Debit Credit
Cash …………………………………………………….
Accounts Receivable …………………………….
Accumulated Depreciation—
Equipment ………………………………………..
Notes Payable ………………………………………
Accounts Payable …………………………………
Dividends ……………………………………………..
Sales Revenue ………………………………………
Sales Returns and Allowances ………………
Cost of Goods Sold ………………………………
Salaries and Wages Expense ………………..
Advertising Expense …………………………….
$ 37,700
33,700
12,000
6,200
505,400
110,000
26,400
$ 61,000
62,000
17,800
757,200
PROBLEM 5-6B (Continued)
(d) BUSE’S FASHION CENTER
Income Statement
For the Year Ended November 30, 2014
Sales
Cost of goods sold …………………………………… 505,400
Gross profit ……………………………………………… 245,600
Operating expenses
Salaries and wages expense ……………… $110,000
Maintenance and repairs expense ……… 12,100
Freight-out ………………………………………… 11,700
Supplies expense ……………………………… 4,800
Total operating expenses ……………. 223,000
Income from operations …………………………… 22,600
Other expenses and losses
BUSE’S FASHION CENTER
Retained Earnings Statement
For the Year Ended November 30, 2014
Retained earnings, December 1, 2013 ……….. $30,000
Plus: Net income ……………………………………. 15,200
PROBLEM 5-6B (Continued)
BUSE’S FASHION CENTER
Balance Sheet
November 30, 2014
Assets
Current assets
Cash …………………………………………. $37,700
Accounts receivable ………………….. 33,700
Inventory…………………………………… 43,000
Liabilities and Stockholders’ Equity
Current liabilities
Long-term liabilities
Notes payable ($62,000 – $24,000) ………………. 38,000
Total liabilities …………………………………….. 87,200
Stockholders’ equity
PROBLEM 5-7B
ALMA’S DEPARTMENT STORE
Income Statement (Partial)
For the Year Ended December 31, 2014
Sales
Cost of goods sold
Inventory, January 1 ………….. $ 40,500
Purchases …………………………. $456,000
Less: Purchase discounts …. $12,000
Purchase returns
PROBLEM 5-8B
(a)
2013 2014 2015
Cost of goods sold:
Beginning inventory $ 16,000 $ 11,300 $ 16,400
(b)
2013 2014 2015
Sales revenue $229,700 $227,600 $220,000
(c)
2013 2014 2015
Beginning accounts payable $ 17,000 $ 28,000 $ 24,700
(d) Gross profit rate 34.0% 33.8% 35.7%
No. Even though sales declined in 2015 from each of the two prior years,
the gross profit rate increased. This means that cost of goods sold
*PROBLEM 5-9B
(a) General Journal
Date Account Titles Debit Credit
9 Accounts Payable …………………………………… 350
Purchase Returns and
Allowances …………………………….
350
17 Accounts Payable …………………………………… 45
Purchase Returns and
Allowances …………………………….
45
20 Accounts Receivable ………………………………. 1,330
Sales Revenue ……………………………….. 1,330
*PROBLEM 5-9B (Continued)
Date
A
ccount Titles Debit Credit
30 Cash ……………………………………………………… 1,900
Accounts Receivable ……………………. 1,900
(b)
Cash
Accounts Receivable
11/10 1,000
11/20 1,330
11/27 150
11/30 1,900
11/30 Bal. 280
Accounts Payable
11/9 350
11/5 1,600
Common Stock
11/20 1,330
11/30 Bal. 2,330
Sales Returns and Allowances
11/27 150
11/5 1,600
11/12 945
11/30 Bal. 2,545
*PROBLEM 5-9B (Continued)
Purchase
Returns and Allowances
Purchase Discounts
Freight-In
11/7 90
(c)
WINONA SPORTS
Trial Balance
November 30, 2014
Debit Credit
Accounts Payable ……………………………………………… $ –0–
Common Stock ………………………………………………….. 8,000
Sales Revenue …………………………………………………… 2,330
*PROBLEM 5-9B (Continued)
(d)
WINONA SPORTS
Income Statement (Partial)
For the Month Ended November 30, 2014
_______________________________________________________________
Sales
Less: Purchase returns
and allowances …………… $395
Purchase discounts …… 34 429
Net purchases ……………………….. 2,116
Add: Freight-in …………………….. 90
Cost of goods purchased ………. 2,206
COMPREHENSIVE PROBLEM SOLUTION
(a) Dec. 6 Salaries and Wages Payable………………..
.
.
.
1,000
Sales Revenue ……………………………..
.
Cost of Goods Sold ……………………………..
.
Inventory ……………………………………..
.
4,100
6,300
4,100
.
.
.
.
.
20 Salaries and Wages Expense……………….
.
Cash …………………………………………….
.
1,800
1,800
.
COMPREHENSIVE PROBLEM SOLUTION (Continued)
Supplies Expense ………………………………..
.
Supplies ($3,200 – $1,500) ……………..
.
1,700
1,700
Income Tax Expense ……………………………
.
Income Taxes Payable …………………..
.
200
200
(b) & (c) General Ledger
Cash
12/1 Bal. 7,200
A
—
12/6 1,600
12/18 12,000
12/27 12,000
12/31 Bal. 2,700
Inventory
12/1 Bal. 12,000
12/10 4,100
Equipment
12/1 Bal. 22,000
A
ccounts Payable
12/23 9,000 12/1 Bal. 4,500
12/13 9,000
12/31 Bal. 4,500
COMPREHENSIVE PROBLEM SOLUTION (Continued)
Common Stock
12/1 Bal. 15,000
12/31 Bal. 15,000
Retained Earnings
Sales Revenue
12/10 6,300
12/18 12,000
12/31 Bal. 18,300
Sales Discounts
12/27 360
Depreciation Exp.
12/31 200
12/31 Bal. 200
Salaries and Wages Expense
Supplies Expense
12/31 1,700
12/31 Bal. 1,700
Income Tax Expense
12/31 200
COMPREHENSIVE PROBLEM SOLUTION (Continued)
(d) BOLINE DISTRIBUTING COMPANY
Adjusted Trial Balance
December 31, 2014
DR. CR.
Cash ………………………………………………………
.
$12,820
Accounts Receivable………………………………
.
2,700
Inventory ………………………………………………..
.
8,720
Supplies …………………………………………………
.
1,500
Equipment ……………………………………………..
.
22,000
Accumulated Depreciation
—
Equipment…..
.
$ 2,400
Accounts Payable …………………………………..
.
4,500
Salaries and Wages Payable……………………
.
800
.
.
(e) BOLINE DISTRIBUTING COMPANY
Income Statement
For the Month Ending December 31, 2014
Sales revenue …………………………………………
.
$18,300
Less: Sales discounts ……………………………
.
360
Net sales ………………………………………………..
.
17,940
.
.
.
COMPREHENSIVE PROBLEM SOLUTION (Continued)
BOLINE DISTRIBUTING COMPANY
Retained Earnings Statement
For the Month Ended December 31, 2014
Retained earnings, Dec. 1 ………………………………………
.
$24,300
.
BOLINE DISTRIBUTING COMPANY
Balance Sheet
December 31, 2014
Assets
Current assets
Cash ………………………………………………….
.
$12,820
Accounts receivable …………………………..
.
2,700
Liability and Stockholders’ Equity
Current liabilities
Accounts payable ………………………………
.
$ 4,500
.
BYP 5-1 FINANCIAL REPORTING PROBLEM
(a) Percentage change in total revenue:
(b) Profit margin:
2009 $53,157 ÷ $499,331 = 10.6%
(c) Gross profit rates:
2009 $175,817* ÷ $495,592 = 35.5%