Need home work help account exercise

Accounting for Merchandising Businesses

Complete the following exercise using excel template.

E4-1

Determining gross profit

During the current year, merchandise is sold for $1,375,000. The cost of the merchandise sold is $880,000.

• a. What is the amount of the gross profit?

• b. Compute the gross profit percentage (gross profit divided by sales).

• c. Will the income statement necessarily report a net income? Explain.

   

  Ex 4-6 Income statement for merchandiser

  For the fiscal year, sales were $8,300,000, sales discounts were $100,000, sales returns and allowances were $45,000, and the cost of merchandise sold was $5,000,000.

• a. What was the amount of net sales?

• b. What was the amount of gross profit?

   

  E4-7

  Income statement for merchandiser

  The following expenses were incurred by a merchandising business during the year. In which expense section of the income statement should each be reported: (a) selling, (b) administrative, or (c) other?

• 1. Advertising expense

• 2. Depreciation expense on store equipment

• 3. Insurance expense on office equipment

• 4. Interest expense on notes payable

• 5. Rent expense on office building

• 6. Salaries of office personnel

• 7. Salary of sales manager

• 8. Sales supplies used