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    HW CH5

    Uploaded by

    Hà Hoàng

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    © All Rights Reserved
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    HW CH5

    Uploaded by

    Hà Hoàng
    21 views4 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views4 pages

    HW CH5

    Uploaded by

    Hà Hoàng

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    E5-1

    1. Measuring net income for a merchandiser is conceptually the same as for a


    service company. TRUE
    2. For a merchandiser, sales less operating expenses is called gross profit. FALSE
    -> For a merchandiser, sales revenue less cost of goods sold is called gross profit
    3. For a merchandiser, the primary source of revenues is the sale of inventory.
    TRUE
    4. Sales salaries and wages is an example of an operating expense. TRUE
    5. The operating cycle of a merchandiser is the same as that of a service company.
    FALSE
    -> The operating cycle of a merchandiser is longer than that of a service company.
    6. In a perpetual inventory system, no detailed inventory records of goods on hand
    are maintained. FALSE
    -> In a perpetual inventory system, records continuously show inventory that should
    be on hand for every item.
    7. In a periodic inventory system, the cost of goods sold is determined only at the
    end of the accounting period. TRUE
    8. A periodic inventory system provides better control over inventories than a
    perpetual System. FALSE
    -> A perpetual System provides better control over inventories than a periodic
    inventory system because a periodic system does not keep detailed records of the
    goods on hand.

    E5-9
    (a) Prepare a multiple-step income statement.

    KAILA COMPANY
    Income Statement
    For the Month Ended March 31, 2017

    Sales
    Sales revenue $ 380,000
    Less: Sales returns and allowances $ 13,000
    Sales discounts 8,000 21,000
    Net sales 359,000
    Cost of goods sold 215,000
    Gross profit 144,000
    Operating expenses
    Salaries and wages expense 58,000
    Freight-out 7,000
    Insurance expense 6,000
    Rent expense 30,000
    Total operating expenses 101,000
    Income from operations $ 43,000 (2 gạch)
    (b) Compute the gross profit rate.
    Gross profit rate = Gross profit / Net sales
    = 144,000 / 359,000 = 0.4011 = 40.11%
    E5-10
    (a) Prepare a multiple-step income statement.

    ANHAD COMPANY
    Income Statement
    For the Year Ended December 31, 2017

    Sales
    Net sales $ 2,200,000
    Cost of goods sold 1,289,000
    Gross profit 911,000
    Operating expense 725,000
    Income from operations 186,0000
    Other revenues and gains
    Interest revenue $ 28,000 28,000
    Other expenses and losses
    Interest expense 70,000
    Loss on disposal of plant assets 17,000 87,000
    Net income $ 127,000

    (b) Prepare a single-step income statement.

    ANHAD COMPANY
    Income Statement
    For the Year Ended December 31, 2017

    Revenues
    Net sales $ 2,200,000
    Interest revenue 28,000
    Total revenues 2,228,000
    Expenses
    Cost of goods sold $ 1,289,000
    Operating expenses 725,000
    Interest expense 70,000
    Loss on disposal of plant assets 17,000
    Total expenses 2,101,000
    Net income $ 127,000
    P5-1A

    Kern's Book Warehouse

    General Entries

    (Perpetual Inventory System)

    Date Account titles & Explanations Ref Debit Credit

    June 1 Inventory 120 1,600

    Accounts Payable 201 1,600

    3 Accounts Receivable 112 2,500

    Sales 401 2,500

    Cost of Goods Sold 505 1,440

    Inventory 120 1,440

    6 Accounts Payable 201 100

    Inventory 120 100

    9 Accounts Payable ($1,600 - $100 - $1,500) 201 1,500

    Inventory ($1,500x2%=$30) 120 30

    Cash ($1,500-$30=$1,470) 101 1,470

    15 Cash 101 2,500

    Accounts Receivable 112 2,500

    17 Accounts Receivable 112 1,800

    Sales 401 1,800

    Cost of Goods Sold 505 1,080

    Inventory 120 1,080

    20 Inventory 120 1,800

    Account payable 201 1,800

    24 Sale Discount ( 1,800 x 2%= 36) 414 36

    Cash ( 1,800 - 36= 1,764) 101 1,764


    Account Receivable 112 1,800

    26 Account Payable 201 1,800

    Inventory ( 1,800x2%= 36) 120 36

    Cash ( 1,800 - 36= 1,764) 101 1,764

    28 Account Receivable 112 1,600

    Sale 401 1,600

    Cost of goods sold 505 970

    Inventory 120 970

    30 Sales Returns and Allowances 412 120

    Account Receivable 112 120

    Inventory 120 72

    Cost of goods sold 505 72

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