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stice19_student_04-50.xlsx

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04-50

04-50				Name:
	Enter the appropriate numbers/formulas in the blue-shaded cells.
	The word “Wrong” will appear to the left of incorrect entries.
	Hint: Complete supporting computations as needed to plug in determined amounts into income statement.
	Supporting computations for the income statement below:
	(a)	Cash collections
		Accounts receivable, December 31, 2014
		Accounts receivable, December 31, 2015
		Sales
	(b)	Cash payments
		Accounts payable, December 31, 2014
		Accounts payable, December 31, 2015
		Cash general and administrative expenses*
		Selling expenses
		Wages and salaries payable, December 31, 2014
		Purchases
	*	Total general and administrative expenses
		Less depreciation on store equipment
		Cash general and administrative expenses
	(c)	Selling expense
		Divided by % of gross profit
		Gross profit
	(d)	Sales (a)
		Gross profit (c)
		Cost of goods sold
		Beginning inventory
		Purchases (b)
		Ending inventory
	(e)	Sales
		Multiplied by % of sales
		General and administrative expenses
	(f)	Income before income taxes (see income statement)
		Multiplied by income tax rate
		Income taxes
	(g)	General and administrative expenses
		Multiplied by % of general and admin. expenses
		Depreciation
	SAYER SPORTING GOODS
	Income Statement
	For the Year Ended December 31, 2015
	Sales						(a)
	Cost of goods sold:
		Beginning inventory	$ 12,180
		Purchases		(b)
		Goods available for sale
		Less: Ending inventory				(d)
		Cost of goods sold
	Gross profit						(c)
	Operating expenses:
		Selling expenses			$ 12,352
		General and administrative expenses
		Total operating expenses
	Income from operations before taxes
	Income taxes						(f)
	Net income
	Earnings per share

Solution

04-50				Name:
	Enter the appropriate amounts/formulas in the blue-shaded cells.
	The word “Wrong” will appear to the left of incorrect answers.
	Hint: Complete supporting computations as needed to plug in determined amounts into income statement.
	Supporting computations for the income statement below:
	(a)	Cash collections			$ 105,260
		Accounts receivable, December 31, 2014			(22,150)
		Accounts receivable, December 31, 2015			18,920
		Sales			$ 102,030
	(b)	Cash payments			$ 92,450
		Accounts payable, December 31, 2014			(10,830)
		Accounts payable, December 31, 2015			7,120
		Cash general and administrative expenses			(22,447)
		Selling expenses			(12,352)
		Wages and salaries payable, December 31, 2014			(4,450)
		Purchases			$ 49,491
	*	Total general and administrative expenses			$ 25,508
		Less depreciation on store equipment			3,061
		Cash general and administrative expenses			$ 22,447
	(c)	Selling expense			$ 12,352
		Divided by % of gross profit			20%
		Gross profit			$ 61,760
	(d)	Sales (a)			$ 102,030
		Gross profit (c)			61,760
		Cost of goods sold			$ 40,270
		Beginning inventory			12,180
		Purchases (b)			49,491
		Ending inventory			$ 21,401
	(e)	Sales			$ 102,030
		Multiplied by % of sales			25%
		General and administrative expenses			$ 25,508
	(f)	Income before income taxes (see income statement)			$ 23,900
		Multiplied by income tax rate			40%
		Income taxes			$ 9,560
	(g)	General and administrative expenses			$ 25,508
		Multiplied by % of general and admin. expenses			12%
		Depreciation			$ 3,061
	SAYER SPORTING GOODS
	Multiple-Step Income Statement
	For the Year Ended December 31, 2015
	Sales						$ 102,030	(a)
	Cost of goods sold:
		Beginning inventory	$ 12,180
		Purchases	49,491	(b)
		Goods available for sale			$ 61,671
		Less: Ending inventory			21,401	(d)
							40,270
	Gross profit						$ 61,760	(c)
	Operating expenses:
		Selling expenses			$ 12,352
		General and administrative expenses			25,508
		Total operating expenses					37,860
	Income from operations before taxes						$ 23,900
	Income taxes						9,560	(f)
	Net income						$ 14,340
	Earnings per share						$ 2.87