Question 1

Kingbridge Range Company has sales in 2014 of $2,650,000. During the year, the company had $80,000 in sales returns. The cost of these sales was $1,800,000. Operating expenses excluding salaries and wages were $150,000 and salaries and wages incurred during the year were $300,000. Kingbridge uses a perpetual inventory system.
Instructions
Calculate Kingbridge Range Company's gross profit margin and profit margin for 2014.

Accepted Answer

The answer of Kingbridge Range Company has sales in 2014...

Question 2

The following information is taken from the financial statements of Down Home Deli for the last three years. The owner, John Walton is quite pleased to see that his sales are growing steadily.  Instructions 
a. Calculate gross profit margin, profit margin, and profit margin using profit from operations.
b. Comment on whether the Deli is, in fact, doing better over the three years as John believes.

Accepted Answer

The answer of The following information is taken from the...

Question 3

The adjusted trial balance of Cochrane Company includes the following accounts:  The company uses a perpetual inventory system.
Instructions
Prepare a multiple-step income statement for the year ended December 31, 2014.

Accepted Answer

The answer of The adjusted trial balance of Cochrane Company...

Question 4

Mark Company gathered the following condensed data for the year ended December 31, 2014:  The company uses a perpetual inventory system.
Instructions
Prepare a single-step income statement in good form.

Accepted Answer

The answer of Mark Company gathered the following condensed data...

Question 5

Presented below is the adjusted trial balance of Katie's Pet Supplies as at its fiscal year end, June 30, 2014. All accounts are their normal balance (debit or credit). Katie's uses the perpetual inventory system.  Instructions 
a. Prepare a single-step income statement.
b. Prepare a multiple-step income statement.
c. Calculate Katie's gross profit margin. Katie's gross profit margin for 2013 was 45%. Comment on the change in gross profit margin from the prior year.

Accepted Answer

The answer of Presented below is the adjusted trial balance...

Question 6

Two items are missing in each of the following columns and are identified by a letter.
Instructions
Assuming the company uses a perpetual inventory system, calculate the missing amounts and identify them by letter.

Accepted Answer

The answer of Two items are missing in each of...

Question 7

The adjusted trial balance of Small Book Company appears below. The company uses a perpetual inventory system.  Instructions
Prepare the end of the year closing journal entries.

Accepted Answer

The answer of The adjusted trial balance of Small Book...

Question 8

Using a perpetual inventory system, state the missing items identified by ?.
1. Net sales - Cost of goods sold = ?
2. Gross profit - Operating expenses = ?
3. Sales - ? = Net sales
4. Profit from operations + ? - ? = Profit
5. Cost of goods sold + Gross profit on sales = ?

Accepted Answer

The answer of Using a perpetual inventory system, state the...

Question 9

Financial information is provided for three different businesses:  Instructions
Calculate the missing amounts.

Accepted Answer

The answer of Financial information is provided for three different...

Question 10

The following is a random list of the accounts and their balances for Gordon Auto Sales (a proprietorship owned by A. Gordon) on December 31, 2014. The company uses a perpetual inventory system.  A physical count of inventory on December 31, 2014 reveals $671,575 on hand.
Instructions 
a. Prepare the entry to adjust inventory.
b. Prepare the closing entries on December 31, 2014.
c. Prepare the post-closing trial balance.

Accepted Answer

The answer of The following is a random list of...

Question 11

Tantramar Shipbuilding Company had the following information available at its year end September 30, 2014. Accounts are listed in alphabetical order for the convenience of the bookkeeper.  Instructions 
a. Calculate the gross profit margin for Tantramar.
b. Calculate the profit from operations for Tantramar.
c. Calculate the profit margin for Tantramar.
d. List three actions which Tantramar could take to increase its profit margin.
e. If last year's gross profit margin was 39%, comment on the company's results this year.

Accepted Answer

The answer of Tantramar Shipbuilding Company had the following information...

Question 12

Omari Company produces and sells various types of beach toys. Listed below are the transactions for the month of June:
June 1 Sold 18 water tubes for $250 each terms n/30 FOB destination. Each tube cost $95.
8 Customer returned 2 tubes due to defects. Issued a full refund and scrapped the defective tubes.
10 Freight charges of $85 paid by the responsible party.
11 Customer complained about competitive pricing. Granted customer a $200 credit for tubes purchased.
15 Sold 92 tubes for $225 each terms 2/10 n/30. Each tube cost $95.
18 Received payment in full for June 1 transaction.
20 Received payment in full for June 15 transaction.
Instructions
a. Journalize transactions using the perpetual inventory system.
b. Determine the amount of net sales to be reported on the income statement of Omari Company.

Accepted Answer

The answer of Omari Company produces and sells various types...

Question 13

Mischa Company has a current inventory balance of $864,200.
Instructions
Prepare the ending inventory adjustment required assuming a year-end inventory account revealed the following balance:
a. $862,500
b. $922,600
c. $864,200

Accepted Answer

The answer of Mischa Company has a current inventory balance...

Question 14

Kingbridge Range Company has sales in 2014 of $2,650,000. During the year, the company had $50,000 in sales returns and $30,000 in sales discounts. The cost of these sales was $1,800,000. Operating expenses excluding salaries and wages were $150,000 and salaries and wages incurred during the year were $300,000. Kingbridge uses a perpetual inventory system.
Instructions
Prepare a multiple-step income statement for Kingbridge Range Company for the year ended December 31, 2014.

Accepted Answer

The answer of Kingbridge Range Company has sales in 2014...

Question 15

Financial information is presented here for two companies:  Instructions 
a. Fill in the missing amounts. Show all calculations.
b. Calculate the gross profit margin and profit margin for each company.

Accepted Answer

The answer of Financial information is presented here for two...

Question 16

The adjusted trial balance of Singh Company includes the following income statement accounts:  Instructions
Prepare the closing entries for the Singh Company.

Accepted Answer

The answer of The adjusted trial balance of Singh Company...

Question 17

Mischa Company has an inventory balance of $903,950 on December 31, 2014. During 2015 Mischa purchased merchandise for $97,500 and sold merchandise that had a cost of $714,220.
Instructions
a. Prepare the adjusting entries assuming the inventory count on December 31, 2014 revealed a balance of $914,450.
b. Prepare the adjusting entries assuming the inventory count on December 31, 2015 revealed a balance of $292,370.

Accepted Answer

The answer of Mischa Company has an inventory balance of...

Question 18

Loa's Hardware's trial balance for the year ended December 31, 2014 is provided below. Loa's uses the perpetual inventory system. A count of the inventory on hand shows the actual amount on hand is $26,500. All other year-end adjusting entries have been made.  Instructions 
a. Prepare the adjusting entry to record the correct inventory account.
b. Prepare the closing entries.
c. Prepare a multiple-step income statement for Low's Hardware.

Accepted Answer

The answer of Loa's Hardware's trial balance for the year...

Question 19

Hernandez Clothing Store employs the perpetual inventory system and prepares monthly financial statements. All accounts have been adjusted except for merchandise inventory. A physical count of merchandise inventory on November 30, 2014, indicates that $21,000 was on hand. A partial listing of account balances follows:  Instructions 
a. Prepare a partial income statement for the Hernandez Clothing Store for the month ended November 30, 2014. The income statement should show items through the gross profit category.
b. Calculate Hernandez's gross profit margin for November, 2014.

Accepted Answer

The answer of Hernandez Clothing Store employs the perpetual inventory...

Question 20

On October 1, Ki's Bicycle Store had an inventory of 10 mountain bicycles at a cost of $150 each. During the month of October, the following transactions occurred:
Oct. 3 Purchased 20 bicycles at a cost of $150 each from the Lyons Bicycle Company, terms n/30.
6 Sold 20 bicycles to Team Canada for $250 each, terms n/30.
7 Received credit from the Lyons Bicycle Company for the return of 2 defective bicycles.
13 Issued a credit to Team Canada for the return of a defective bicycle.
19 Purchased 10 BMX bicycles from Huffy Bicycle Company at a cost of $125 each, terms n/30.
20 Paid freight of $80 on the October 19 purchase.
Instructions
Prepare the journal entries to record the transactions assuming the company uses a periodic inventory system.

Accepted Answer

The answer of On October 1, Ki's Bicycle Store had...

Quiz 5: Accounting for Merchandising Operations

The adjusted trial balance of Cochrane Company includes the following accounts: The company uses a perpetual inventory system. Instructions Prepare a multiple-step income statement for the year ended December 31, 2014.

Mark Company gathered the following condensed data for the year ended December 31, 2014: The company uses a perpetual inventory system. Instructions Prepare a single-step income statement in good form.

Two items are missing in each of the following columns and are identified by a letter. Instructions Assuming the company uses a perpetual inventory system, calculate the missing amounts and identify them by letter.

The adjusted trial balance of Small Book Company appears below. The company uses a perpetual inventory system. Instructions Prepare the end of the year closing journal entries.

Using a perpetual inventory system, state the missing items identified by ?. 1. Net sales - Cost of goods sold = ? 2. Gross profit - Operating expenses = ? 3. Sales - ? = Net sales 4. Profit from operations + ? - ? = Profit 5. Cost of goods sold + Gross profit on sales = ?

Financial information is provided for three different businesses: Instructions Calculate the missing amounts.

Mischa Company has a current inventory balance of $864,200. Instructions Prepare the ending inventory adjustment required assuming a year-end inventory account revealed the following balance: a. $862,500 b. $922,600 c. $864,200

Financial information is presented here for two companies: Instructions a. Fill in the missing amounts. Show all calculations. b. Calculate the gross profit margin and profit margin for each company.

The adjusted trial balance of Singh Company includes the following income statement accounts: Instructions Prepare the closing entries for the Singh Company.