Prepare a detailed income statement

Reference no: EM131722670

PROBLEM

Le Bere Office Supplies Company
Work Sheet
For the Year Ended September 30, 19x4

	Trial Balance		Adjustments		Income Statement		Balance Sheet
Account Name	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
Cash	21,150						21,150
Accounts Receivable	74,490						74,490
Merchandise Inventory	214,200				214,200	266,700	266,700
Store Supplies	11,400			(a) 9,750			1,650
Prepaid Insurance	14,400			(b) 7,200			7,200
Store Equipment	253,900						253,900
Accumulated Depreciation Store Equipment		76,500		(c) 15,000				91,500
Accounts Payable		116,850		(e) 300				117,150
Grace Le Bere, Capital		484,050						484,050
Grace Le Bere, Withdrawals	72,000						72,000
Sales		1,225,750				1,225,750
Sales Returns and Allowances	25,440				25,440
Purchases	754,800				754,800
Purchases Returns and Allowances		18,150				18,150
Freight In	31,200				31,200
Sales Salaries Expense	193,800		(d) 1,950		195,750
Rent Expense	144,000				144,000
Other Selling Expenses	98,730				98,730
Utilities Expense	11,790		(e) 300		12,090
	1,921,300	1,921,300

Store Supplies Expense	(a) 9,750		9,750
Insurance Expense	(b) 7,200		7,200
Depreciation Expense, Store Equipment	(c) 15,000		15,000
Sales Salaries Payable		(d) 1,950				1,950
	34 200	34,200	1,508,160	1,510,600	697,090	694,650
Net Income

1. Complete the totals in columns 5 through 8 of the worksheet.

2. Prepare a detailed Income Statement [see the format on page 281 (Exhibit 10) and 291 (Exhibit 16) of the textbook as an example].

Prepare both Exhibits for your quiz.

3. Compute the Gross Profit (GP) ratio and the Inventory Turnover. See pgs 340 - 344 (Chp 7).

(a) GP = Net Sales - COGS (pages 265 & 282). GP ratio = "Gross Profit" / "Net Sales".

4. Prepare the closing entries (assume periodic 'inventory). See pages 291 - 292.

NOTE: The Merchandise Inventory amounts in the Income Statement and Balance Sheet of the worksheet $214,288 (Beg Inv.) and $266,700 (End Inv). See pages 289-292 of textbook.

Reference no: EM131722670

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