Brief Exercise 5-1
Presented here are the components in Casilla Companyâ€™s income statement.
Determine the missing amounts.
Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income
sales COGS GP Operating exp NP
Year 1 $ 71,200 $ 30,000 $ 12,100
Year 2 $ 108,000 $ 70,000 $ 29,500
Year 3 $ 71,900 $ 109,600 $ 46,200
Brief Exercise 5-8
Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases $404,000; Purchase Returns and Allowances $13,000; Purchase Discounts $9,000; and Freight-in $16,000.
Determine net purchases and cost of goods purchased.
Brief Exercise 5-9
Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases $404,000; Purchase Returns and
Allowances $13,000; Purchase Discounts $9,000; and Freight-in $16,000. Tracy Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $612,000.
Determine the amounts to be reported for cost of goods sold and gross profit.
Brief Exercise 5-10
Durbin Corporation reported net sales of $250,000, cost of goods sold of $150,000, operating expenses of $50,000, net income of $32,500,
beginning total assets of $520,000, and ending total assets of $600,000.
Calculate profit margin and gross profit rate. (Round answers to 0 decimal places, e.g. 10%.)
Exercise 5-6 (Part Level Submission)
Presented below is information for Zhou Co. for the month of January 2014.
Cost of goods sold $212,000 Rent expense $32,000
Freight-out 7,000 Sales discounts 8,000
Insurance expense 12,000 Sales returns and allowances 20,000
Salaries and wages expense 60,000 Sales revenue 370,000
(a) Prepare an income statement using the multi-step format. Assume a 25% tax rate.
(b) Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%.)
McCoy Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the
month of June, the following merchandising transactions occurred.
June 1 Purchased books on account for $1,040 (including freight) from Carlin Publishers, terms 2/10, n/30.
3 Sold books on account to the Goldschmidt bookstore for $1,200. The cost of the merchandise sold was $720.
6 Received $40 credit for books returned to Carlin Publishers.
9 Paid Carlin Publishers in full.
15 Received payment in full from the Goldschmidt bookstore.
17 Sold books on account to Town Crier for $1,200. The cost of the merchandise sold was $730.
20 Purchased books on account for $720 from Good Book Publishers, terms 1/15, n/30.
24 Received payment in full from Town Crier.
26 Paid Good Book Publishers in full.
28 Sold books on account to Emporia Bookstore for $1,300. The cost of the merchandise sold was $780.
30 Granted Emporia Bookstore $130 credit for books returned costing $80.
Journalize the transactions for the month of June for McCoy Warehouse, using a perpetual inventory system. (Credit account titles are
automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the
problem. Round answers to 0 decimal places e.g. 15,222.)
Problem 5-9A (Part Level Submission)
At the beginning of the current season on April 1, the ledger of Flint Hills Pro Shop showed Cash $ 2,500 ; Inventory $ 3,500 ; and Common
Stock $ 6,000 . The following transactions occurred during April 2014.
Apr. 5 Purchased golf bags, clubs, and balls on account from Akers Co. $ 1,500 , terms 3 /10, n/60.
7 Paid freight on Akers Co. purchases $ 80 .
9 Received credit from Akers Co. for merchandise returned $ 200 .
10 Sold merchandise on account to members $ 1,340 , terms n/30.
12 Purchased golf shoes, sweaters, and other accessories on account from Palmer Sportswear $ 830 , terms 1 /10, n/30.
14 Paid Akers Co. in full.
17 Received credit from Palmer Sportswear for merchandise returned $ 30 .
20 Made sales on account to members $ 810 , terms n/30.
21 Paid Palmer Sportswear in full.
27 Granted credit to members for clothing that did not fit properly $ 80 .
30 Received payments on account from members $ 1,220 .
(a)Journalize the April transactions using a periodic inventory system. (Credit account titles are automatically indented when amount is
entered. Do not indent manually. Record journal entries in the order presented in the problem.)
(b)Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions. (Post entries in the order of journal
entries posted in part a.)
(c)Prepare a trial balance on April 30, 2014.
(d)Prepare an income statement through gross profit, assuming inventory on hand at April 30 is $4,263.