Answer questions 38A and 39A 310 chapter 5 Learning Objectives 5, 6P5-38A Prepar
ID: 2339392 • Letter: A
Question
Answer questions 38A and 39A
310 chapter 5 Learning Objectives 5, 6P5-38A Preparing a single-step income statement, preparing a multi-step income statement, and computing the gross profit percentage The records of Farm Quality Steak Company list the folleoving selected accounts for the quarter ended April 30, 2018 2 Operating Income $93,120 $ 400 Accounts Payable 17,700 Interest Revenue Merchandise inventory Notes Payable, long-term Salaries Payable Net Sales Revenue Rent Expense (Selling) Salaries Expense (Administrative) Office Supplies Unearned Revenue Interest Expense Depreciation Expense-Equipment (Administrative) Utilities Expense (Administrative) 38,200 37,700 30,000 5,380 25,000 7,100 154,960 132,000 1,700 7,100 6,000 10,000 45,000 Accounts Receivable 54,000 Accumulated Depreciation-Equipment 2,800 Common Stock 298,000 Retained Earnings 15,100 Dividends 2,000 Cash 6,500 Cost of Goods Sold 13,100 Equipment 2,100 Interest Payable 1,320 Rent Expense (Administrative) 4,600 Salaries Expense (Selling) 3,800 Utilities Expense (Selling) Delivery Expense (Selling) Requirements 1. Prepare a single-step income statement. 2. Prepare a multi-step income statement. 3. M. Doherty, manager of the company, strives to earn a gross protit percentage of at least 50%. Did Farm Quality achieve this goal? Show your calculations. Learning Objective 8 P5B-39A Journalizing purchase and sale transactions-periodic inventory system Appendix 5B Journalize the following transactions that occurred in March 2018 for Double Com. pany. Assume Double uses the periodic inventory system. No explanations are needed. Identify cach accounts payable and accounts receivable with the vendor or customer name. Double estimates sales returns at the end of each month. Mar. 3 Purchased merchandise inventory on account from Sidecki Wholesalers, $5,500. Terms 2/15, VEOM, FOB shipping point. 4 Paid freight bill of $70 on March 3 purchase. 4 Purchased merchandise inventory for cash of $1,100. 6 Returned $900 of inventory from March 3 purchase. 8 Sold merchandise inventory to Herrick Company, $3,400, on account. Terms 1/15, nv35 9 Purchased merchandise inventory on account from Tex Wholesalers, $5,600. Terms 2/10, n/30, FOB destination. Made payment to Sidecki Wholesalers for goods purchased on March 3, less return and discount 10 12 Received payment from Herrick Company, less discount. 13 After negotiations, received a $500 allowance from Tex Wholesalers 15 Sold merchandise inventory to Jesper Company, $1,700, on account. Terms rVEOM. 22 Made payment, less allowance, to Tex Wholesalers for goods purchased on March 9. 23 Jesper Company returned $300 of the merchandise sold on March 15. 25 Sold merchandise inventory to Salter for $1,000 on account. Terms of 1/10, n/30 29 30 was offered, FOB shipping point. Received payment from Salter, less discount. Received payment from Jesper Company, less return.Explanation / Answer
39A 1 Single Step Income Statement Farm Quality Steak Company Income Statement for Quarter ended 30th April 2018 In $ Sales $298,000 Interest Revenue $400 Total Revenue 298400 Less Wages and Salaries - Administrative 8000 Rent Expense 22200 Cost of Goods Sold 154960 Depreciation 1320 Interest Expense 2100 Utilities Expense 14600 Delivery Expense 3800 Net Income 91420 2 Multiple Step Income Statement Farm Quality Steak Company Income Statement for Quarter ended 30th April 2018 In $ Sales $298,000 Less : Cost of Goods Sold $154,960 Gross Profit 143040 Operating Expenses Delivery Expense $3,800 Wages and Salaries- Sales $6,000 Rent Expense $15,100 Utilities Expense $10,000 $34,900 Administrative Expenses Wages and Salaries $2,000 Utilities Expense $4,600 Depreciation on Equipment $1,320 Rent Expense $7,100 $15,020 Total Operating Expenses $49,920 Net Operating Income 93120 Non Operating or other Other Income and Gains Interest Revenue $400 Other Expense and Losses Interest Expense $2,100 Net Income $91,420 3 Gross Profit % - 143040/298000 48.00% The company did not achieve the gross profit % target which is 48% for quarter ended April 2018 39B Date Transactions Debit Credit 3-Mar-18 Purchases $5,500 To Sidecki Wholesalers $5,500 4-Mar-18 Freight Charges $70 To Cash $70 4-Mar Purchases $1,100 To Cash $1,100 6-Mar Sidecki Wholesalers $900 To Purchases returns and allowances $900 8-Mar Herrick Company $3,400 To Sales $3,400 9-Mar Purchases $5,600 To Tex Wholesalers $5,600 10-Mar Sidecki Wholesalers 4400 To Cash 4312 To Purchase Discount 88 (5500-1100)*2% 12-Mar Cash $3,060 Sales Discount $340 To Herrick Company $3,400 13-Mar Purchases returns and allowances $500 To Tex Wholesalers $500 15-Mar Jesper Company $1,700 To Cash $1,700 22-Mar Tex Wholesalers 5100 To Cash 4998 To Purchases Discount 102 (5600-500)*2% 23-Mar Sales Return and allowances $300 To Jesper company $300 25-Mar Salter $1,000 To Sales $1,000 29-Mar Cash 10 Sales Discount 990 To Salter $1,000 30-Mar Cash $1,400 To Jasper $1,400