Solution-Journalize the transactions

Journalize the transactions

Assignment Help Finance Basics

Reference no: EM13842477

Exercise 1.

(a) Journalize the transactions, including explanations. (Note, enter all accounts in one box. The dates have been included to help with formatting).

Date	Account Titles and Explanation	Debit	Credit
Sept. 6

9

10

12

12

14

14

20

20

Exercise 2

(a) Prepare an income statement using the format presented on page 245. Assume a 25% tax rate.

(b) Calculate the profit margin ratio and gross profit rate.

ZHOU COMPANY
Income Statement
For the Month Ended January 31, 2014
Sales Revenues
Account title		Amount
Account title	Amount
Account title	Amount	Amount (Total)
Net Sales
Cost of goods sold
Gross profit	Amount
Operating Expenses
Account title	Amount
Account title	Amount
Account title	Amount
Account title	Amount
Total operating expenses		Amount
Income before income taxes		Amount
Income tax expense		Amount
Net Income		Amount

(b) Profit Margin Ratio

Gross Profit Rate

PROBLEM 3

Prepare a correct detailed multiple-step income statement. Assume a tax rate of 25%.

WRIGHT COMPANY
Income Statement
For the Month Ended December 31, 2014
Sales Revenues
Account title		Amount
Account title		Amount
Account title		Amount
Net Sales
Cost of goods sold
Gross profit	Amount
Operating Expenses
Account title	Amount
Account title	Amount
Account title	Amount
Account title	Amount
Account title	Amount
Account title	Amount
Account title	Amount
Total operating expenses		Amount
Income from operations		Amount
Other revenues and gains
Account title	Amount
Other expenses and losses
Account title	Amount	Amount (Total)
Income before income taxes
Income tax expense
Net Income

Problem 4

(a) Determine the Cost of Goods Available for Sale

Date	Explanation	Units	Unit Cost	Total Cost




	Total

(b) Determine the ending inventory and cost of goods sold under each of the assumed cost flow methods. Prove the accuracy of the cost of goods sold under FIFO and LIFO.

FIFO

(1) Ending Inventory				(2) Cost of Goods Sold
Date	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
	Amount		Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

Proof of Cost of Goods Sold (FIFO)
Date	Units	Unit Cost	Total Cost
	Amount		Amount
	Amount		Amount
	Amount		Amount
	Amount		Amount
Total	Amount	Total	Amount

LIFO

(1) Ending Inventory				(2) Cost of Goods Sold
Date	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
	Amount		Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

Proof of Cost of Goods Sold (LIFO)
Date	Units	Unit Cost	Total Cost
	Amount		Amount
	Amount		Amount
	Amount		Amount
	Amount		Amount
Total	Amount	Total	Amount

AVERAGE COST (Round to the nearest decimal, i.e., $1.01)

(1) Ending Inventory				(2) Cost of Goods Sold
	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

(c) Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?

Problem 5

a) Determine the Cost of Goods Available for Sale

Date	Explanation	Units	Unit Cost	Total Cost





	Total

(b) Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO and average-cost). Prove the accuracy of the cost of goods sold under each method.

FIFO

(1) Ending Inventory				(2) Cost of Goods Sold
Date	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
	Amount		Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

Proof of Cost of Goods Sold (FIFO)
Date	Units	Unit Cost	Total Cost
	Amount		Amount
	Amount		Amount
	Amount		Amount
	Amount		Amount
Total	Amount	Total	Amount

LIFO

(1) Ending Inventory				(2) Cost of Goods Sold
Date	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
	Amount		Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

Proof of Cost of Goods Sold (LIFO)
Date	Units	Unit Cost	Total Cost
	Amount		Amount
	Amount		Amount
	Amount		Amount
	Amount		Amount
Total	Amount	Total	Amount

AVERAGE COST (Round to the nearest decimal, i.e., $1.01)

(1) Ending Inventory				(2) Cost of Goods Sold
	Units	Unit Cost	Total Cost	Cost of goods available for sale	Amount
	Amount		Amount	Less: ending inventory	Amount
Total	Amount	Total	Amount	Cost of Goods Sold	Amount

(c) Which cost flow method results in the lowest inventory amount for the balance sheet? The lowest cost of goods sold for the income statement?

Reference no: EM13842477

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Journalize the transactions

Reference no: EM13842477

Reference no: EM13842477

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