Accounting basics-sample homework help

Text-only Preview



Accounting Basics | Sample Assignment | www.expertsmind.com
Question - Merchandising Company Income Statement
The Olympic Company provides the following alphabetic list of accounts and their respective
Balances. All accounts have normal balances, and income statement account balances are
for the year ending December 31, 2011. A physical count of merchandise inventory on hand
year end revealed a balance of $299,000. Use this information to prepare a comprehensive
income statement.
Accounts payable
$66,399
Accounts receivable
82,890
Accumulated depreciation
166,554
Beginning inventory, Jan. 1
185,000
Capital stock
144,000
Cash
25,442
Depreciation expense
25,000
Dividends
12,000
Equipment
324,556
Freight-in
156,000
Insurance expense
9,500
Land and Buildings
5,630,000
Marketing expense
86,230
Office Supplies Expense
3,620
Purchase discounts
26,850
Purchase returns & allowances
16,000
Purchases
980,000
Rent expense
19,600
Retained earnings, Jan. 1
24,327
Salaries expense
158,500
Salaries payable
9,955
Sales
1,580,000
Sales discounts
65,200
Sales returns and allowances
24,000
Utilities expense
12,000






Solution
Answer





:







Opening Trial balance











Accounts payable



66399.00

Accounts receivable


82,890


Accumulated depreciation



166,554

Beginning inventory, Jan. 1


185,000

Capital stock



144,000

Cash


25,442


Depreciation expense


25,000


Dividends


12,000


Equipment


324,556

Freight-in


156,000

Insurance expense


9,500


Land and Buildings


5,630,0

00

Marketing expense


86,230


Office Supplies Expense


3,620


Purchase discounts



26,850

Purchase returns & allowances



16,000

Purchases


980,000

Rent expense


19,600


Retained earnings, Jan. 1



24,327

Salaries expense


158,500

Salaries payable



9,955

Sales



1,580,000

Sales discounts


65,200


Sales returns and allowances


24,000


Utilities expense


12,000


Total


7,799,5
2,034,085
38





5,765,453







Olympic company

Comprehensive Income Statement

For the year ended 31.12.11



Working

Amount
Note
in $

Sales revenue

1

1,556,000

Less: Cost of goods sold

2


1,004,150





Gross profit




551,850








Operating expenses:





General and administrative expenses

3

203,220

Sel ing expenses

4

151,430

Operating income / Comprehensive




income
197,200













Working Note:




1
Sales revenue
1,580,000



Less: Return and allowances
-24,000




Net sales
1,556,000








2
Cost of goods sold





Purchases
980,000




Less :Purchase discounts
26,850




Purchase returns & allowances
16,000









937,150

Freight-in




156,000

Depreciation expense
25,000









1,118,150

Add: Opening stock
185,000




Less: closing stock
-299,000









1,004,150






3
General and administrative expenses





Office Supplies Expense
3,620




Rent expense
19,600




Salaries expense
158,500




Insurance expense




9,500

Utilities expense




12,000


203,220



4
Sel ing expenses





Sales discounts
65,200




Marketing expense
86,230





151,430