Reference no: EM132927811
Question - Use the following information for the next four questions: The nominal accounts of Hazel Lee Co. on December 31, 20x1 have the following balances:
Accounts Dr. Cr.
Interest income 1,045,000
Sales 80,000
Gains 30,000
Inventory, beg. 80,000
Purchases 300,000
Freight-in 30,000
Purchase returns 15,000
Purchase discounts 27,000
Freight-out 25,000
Sales commission 60,000
Advertising expense 35,000
Salaries expense 350,000
Rent expense 60,000
Depreciation expense 80,000
Utilities expense 40,000
Supplies expense 30,000
Transportation and travel expense 25,000
Insurance expense 10,000
Taxes and licenses 50,000
Interest expense 5,000
Miscellaneous expense 2,000
Loss on the sale of equipment 15,000
Additional information:
a. Ending inventory is 100,000.
b. Three-fourths of the salaries, rent, and depreciation expenses pertain to the sales department. The sales department does not share in the other expenses.
In a statement of comprehensive income prepared using the single-step approach (nature of expense method), how much is presented as 'change in inventory'? (increase)/decrease
a. (288,000)
b. 288,000
c. (20,000)
d. 20,000
In a statement of comprehensive income prepared using the single-step approach (nature of expense method), how much is presented as total expenses?
a. 1,055,000
b. 1,075,000
c. 787,000
d. 772,000
In a statement of comprehensive income prepared using the multi-step approach (function of expense method), how much is presented as distribution costs?
a. 398,500
b. 487,500
c. 467,500
d. 512,500
In a statement of comprehensive income prepared using the multi-step approach (function of expense method), how much is presented as administrative expenses?
a. 297,500
b. 302,500
c. 287,500
d. 279,500