Preparing a schedule of cost of goods sold and multistep and single- step income
ID: 2517233 • Letter: P
Question
Preparing a schedule of cost of goods sold and multistep and single- step income statements: Periodic system (Appendix)
The following account titles and balances were taken from the adjusted trial balance of King Co. for 2018. The company uses the periodic inventory system.
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Account title Balance Sales Return and allowances 3500 Miscellaneous Expense 900 Transportation- out 2200 Sales 156,300 Advertising Expense 6200 Salaries Expense 21000 Transportation-in 3800 Purchases 88000 Interest Expense 250 Merchandise inventory, January 1 11200 Rent Expense 12000 Merchandise inventory, December 31 10700 Purchase returns and allowances 2100 Loss on sale of land 3100 Utilities expense 1850 Required A- Prepare a schedule to determine the amount of Cost of Goods sold B- Prepare a Multistep income statement C- Prepare a single-Step income statement King Co. Schedule of Cost of Goods Sold For the Year Ended December 31, 2018 Beginning Merchandise Inventory$ Cost of Goods Available for Sale Less: Ending Merchandise Inventory Cost of Goods SoldExplanation / Answer
ans a Schedule of cOst of Good sold Beginning mercandise Inventory 11200 Add:Purchases 88000 Transportation-in 3800 Purchase returns and allowances -2100 Cost of Goods available for sales 100900 Less: Ending mercandise Inventory 10700 Cost of Good sold 90200 ans b Multiple step Incme statement Sales Gross Sales 156,300 Less: Sales Return and allowances 3500 Net sales 152,800 Less: cost of Good sold 90200 Gross profit 62,600 Operating expenses Salaries Expense 21000 Advertising Expense 6200 Utilities expense 1850 Rent Expense 12000 Transportation- out 2200 Miscellaneous Expense 900 Total operating expenses 44150 Operating income 18,450 Non operating items Interest Expense -250 Loss on sale of land -3100 -3350 Net Income 15,100 Single step Income statement Gross Sales 156,300 Less: Sales Return and allowances 3500 Net sales 152,800 Less: Expenses cost of Good sold 90200 Salaries Expense 21000 Advertising Expense 6200 Utilities expense 1850 Rent Expense 12000 Transportation- out 2200 Miscellaneous Expense 900 Interest Expense 250 Loss on sale of land 3100 Total expenses 137700 Net Income 15,100