RubyCpaMba-Wiley PLUS Brief Exercise 5

Brief Exercise 5-1

Presented below are the components in Gates Company’s income statement. Determine the missing amounts.

		Sales Revenue		Cost of Goods Sold		Gross Profit		Operating Expenses		Net Income
(a)		$75,000		$		$30,000		$		$10,800
(b)		$108,000		$70,000		$		$		$29,500
(c)		$		$83,900		$79,600		$39,500		$

Brief Exercise 5-2

Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)  

Account Titles and Explanation	Debit	Credit
Radomir Company
Lemke Company
(To record credit sale)
(To record cost of merchandise sold)

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Brief Exercise 5-7

Arndt Company provides the following information for the month ended October 31, 2014: sales on credit $280,000, cash sales $100,000, sales discounts $5,000, sales returns and allowances $11,000. Prepare the sales revenues section of the income statement based on this information.

Arndt COMPANY Income Statement (Partial) For the Month Ended October 31, 2014
				$
:
			$

Brief Exercise 5-9

Assume Kader Company has the following reported amounts: Sales revenue $510,000, Sales returns and allowances $15,000, Cost of goods sold $330,000, and Operating expenses $110,000. (a) Compute net sales.

Net sales

$

(b) Compute gross profit.

Gross profit

$

(c) Compute income from operations.

Income from operations

$

(d) Compute the gross profit rate. (Round answer to 1 decimal place, e.g. 25.2%.)

Gross profit rate

%

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Exercise 5-4 (Part level Submission) On June 10, Tuzun Company purchased $8,000 of merchandise from Epps Company, FOB shipping point, terms 2/10, n/30. Tuzun pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Epps for credit on June 12. The fair value of these goods is $70. On June 19, Tuzun pays Epps Company in full, less the purchase discount. Both companies use a perpetual inventory system. Warning Don't show me this message again for the assignment Ok    Cancel    (a) Prepare separate entries for each transaction on the books of Tuzun Company. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)   Date Account Titles and Explanation Debit Credit

Exercise 5-6 (Part level Submission) The adjusted trial balance of Tsai Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2014: Sales Revenue $820,000, Freight-out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000. Warning Don't show me this message again for the assignment Ok    Cancel

(a) Prepare the sales revenues section of the income statement. Tsai COMPANY Income Statement (Partial) For the Year Ended October 31, 2014 $ :  $ $ Warning Don't show me this message again for the assignment Ok    Cancel    Click if you would like to Show Work for this question: Open Show Work Modify Show Work Show List of Accounts

Exercise 5-14

Financial information is presented below for three different companies. Determine the missing amounts.

		Allen Cosmetics		Bast Grocery		Corr Wholesalers
Sales revenue		$90,000			$	(e)		$122,000
Sales returns and allowances			(a)		5,000			12,000
Net sales		86,000			95,000				(i)
Cost of goods sold		56,000				(f)			(j)
Gross profit			(b)		38,000			24,000
Operating expenses		15,000				(g)		18,000
Income from operations			(c)			(h)			(k)
Other expenses and losses		4,000			7,000				(l)
Net income			(d)		11,000			5,000

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