Phoenix Lumber Company uses the number of construction permits issued to help es
ID: 1194047 • Letter: P
Question
Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and number of construction permits issued in its market area:
No. of Construction
Sales
Year
Permits Issued (000)
(1,000,000)
2003
6.50
10.30
2004
6.20
10.10
2005
6.60
10.50
2006
7.30
10.80
2007
7.80
11.20
2008
8.20
11.40
2009
8.30
11.30
No. of Construction
Sales
Year
Permits Issued (000)
(1,000,000)
2003
6.50
10.30
2004
6.20
10.10
2005
6.60
10.50
2006
7.30
10.80
2007
7.80
11.20
2008
8.20
11.40
2009
8.30
11.30
Explanation / Answer
Debit Net sales
31,944
Debit Interest income
333
Credit Cost of goods sold
11,374
Credit Selling, general and administrative
11,774
Credit Other operating charges
350
Credit Interest expense
438
Credit Equity loss
874
Credit Other loss
28
Credit Income taxes
1,632
Credit Retained earnings
5,807
Debit Net sales
31,944
Debit Interest income
333
Credit Cost of goods sold
11,374
Credit Selling, general and administrative
11,774
Credit Other operating charges
350
Credit Interest expense
438
Credit Equity loss
874
Credit Other loss
28
Credit Income taxes
1,632
Credit Retained earnings
5,807