Accounting Problems

Brief Exercise 4-5

The ledger of Rios Company contains the following balances: Owner’s Capital $30,000; Owner’s Drawings $2,000; Service Revenue $50,000; Salaries and Wages Expense $27,000; and Supplies Expense $7,000. The closing entries are as follows:

(1)	Close revenue accounts.
(2)	Close expense accounts.
(3)	Close net income/(loss).
(4)	Close drawings.

Post the closing entries in the order presented in the problem and use the numbers as a reference.

Salaries and Wages Expense
Supplies Expense
Service Revenue
Owner’s Drawings
Income Summary
Owner’s Capital

Exercise 4-1

The trial balance columns of the worksheet for Nanduri Company at June 30, 2014, are as follows.

NANDURI COMPANY Worksheet For the Month Ended June 30, 2014
		Trial Balance
Account Titles		Dr.		Cr.
Cash		2,320
Accounts Receivable		2,440
Supplies		1,880
Accounts Payable				1,120
Unearned Service Revenue				240
Owner’s Capital				3,600
Service Revenue				2,400
Salaries and Wages Expense		560
Miscellaneous Expense		160
Total		7,360		7,360

Other data:

1.		A physical count reveals $500 of supplies on hand.
2.		$100 of the unearned revenue is still unearned at month-end.
3.		Accrued salaries are $210.

Complete the worksheet.

NANDURI COMPANY Worksheet For the Month Ended June 30, 2014

Trial Balance

Adjustments

Adj. Trial Balance

Income Statement

Balance Sheet

Account Titles

Dr

Cr.

Dr

Cr.

Dr

Cr.

Dr

Cr.

Dr

Cr.

Cash

2,320

Accounts Receivable

2,440

Supplies

1,880

Accounts Payable

1,120

Unearned Service Revenue

240

Owner's Capital

3,600

Service Revenue

2,400

Salaries and Wages Expense

560

Miscellaneous Expense

160

Totals

7,360

7,360

Supplies Expense

Salaries and Wages Payable

Totals

Net Income

Totals

Exercise 4-11 (Part level Submission)

Selected accounts for Heather’s Salon are presented below. All June 30 postings are from closing entries.

Salaries and Wages Expense
6/10	3,200	6/30	8,800
6/28	5,600
Supplies Expense
6/12	600	6/30	1,300
6/24	700
Service Revenue
6/30	18,100	6/15	9,700
		6/24	8,400
Rent Expense
6/1	3,000	6/30	3,000
Owner’s Capital
6/30	2,500	6/1	12,000
		6/30	5,000
		Bal.	14,500
Owner’s Drawings
6/13	1,000	6/30	2,500
6/25	1,500

Date	Account Titles and Explanation	Debit	Credit
June 30
	(To close revenue account.)
June 30
	(To close expense account.)
June 30
	(To close net income / (loss).)
June 30
	(To close drawings.)

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		$
Click if you would like to Show Work for this question:	Open Show Work

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)

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

%

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.

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.

(a)

Prepare the sales revenues section of the income statement.

Tsai COMPANY Income Statement (Partial) For the Year Ended October 31, 2014
				$
:
			$
				$

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