RubyCpaMba-Wiley PLUS Brief Exercise 5
| Brief Exercise 5-1 |
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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 |
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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 | ||
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| Lemke Company | ||
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| (To record cost of merchandise sold) |
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| Brief Exercise 5-7 |
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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 | |||||
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: | Brief Exercise 5-9 |
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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 5-14 |
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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 |
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| Cost of goods sold | 56,000 |
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| 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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