Quality Hardwoods Company distributes hardwood products to small furniture manuf
ID: 2398600 • Letter: Q
Question
Quality Hardwoods Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm's worksheet for the year ended December 31, 2016 ACCOUNTS Debit Credit Cash Petty Cash Fund Notes Receivable Accounts Receivable $ 23,300 600 11,000 88,000 llowance for Doubtful Accounts Merchandise Inventory Warehouse Supplies Office Supplies Prepaid Insurance Land Building Accumulated Depreciation-Building Warehouse Equipment Accumulated Depreciation-Warehouse Equipment Delivery Equipment Accumulated Depreciation-Delivery Equipment Office Equipment Accumulated Depreciation-Office Equipment Notes Payable Accounts Payable Interest Payable Mortgage Payable Loans Payable, Long-term Chuck Kirby, Capital (Jan. 1) Chuck Kirby, Drawing Income Summary Sales Sales Returns and Allowances Interest Income Purchases Freight In Purchases Returns and Allowances Purchases Discounts Warehouse Wages Expense Warehouse Supplies Expense Depreciation Expense-Warehouse Equipment Salaries Expense-Sales Travel and Entertainment Expense Delivery Wages Expense $ 5,200 226,000 2,780 1,340 7,800 38,000 170,000 33,000 47,000 21,000 49,200 15,000 18,000 9,600 19,400 38,200 500 57,000 13,000 411,360 126,200 226,000 1,669,000 236,000 17,400 759,000 1,500 13,000 7,640 10,360 191,600 6,300 5,000 261,200 20,700Explanation / Answer
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Analyze:
Current ratio = Current assets/Current liabilities = $355620/$58100 = 6.12
QUALITY HARDWOODS COMPANY Income Statement For the Year Ended December 31, 2016 Operating revenue Sales 1669000 Less: Sales returns and allowances 17400 Net sales 1651600 Cost of goods sold Merchandise inventory, January 1, 2016 236000 Purchases 759000 Freight in 13000 Delivered cost of purchases 772000 Purchases discounts 10360 Purchases returns and allowances 7640 18000 Net delivered cost of purchases 754000 Total merchandise available for sale 990000 Merchandise inventory, December 31, 2016 226000 Cost of goods sold 764000 Gross profit on sales 887600 Operating expenses Warehouse expenses Warehouse wages expense 191600 Warehouse supplies expense 6300 Depreciation expense-warehouse equipment 5000 Total warehouse expenses 202900 Selling expenses Salaries expense-sales 261200 Travel and entertainment expense 20700 Delivery wages expense 59530 Depreciation expense-delivery equipment 9000 Total selling expenses 350430 General and administrative expenses Salaries expense-office 69800 Office supplies expense 3200 Insurance expense 5400 Utilities expense 8490 Telephone expense 5720 Payroll taxes expense 55000 Property taxes expense 4800 Uncollectible accounts expense 5000 Depreciation expense-building 8200 Depreciation expense-office equipment 3200 Total general and administrative expenses 168810 Total operating expenses 722140 Income from operations 165460 Other income Interest income 1500 Other expenses Interest expense 7400 Net nonoperating income -5900 Net income for year 159560