Accounting Midterm - Basic Principles of Accounting TAKE...

Basic Principles of Accounting
TAKE HOME ASSIGNMENT
Inventory
Part A
Problem 6-1A.
1) MULTIPLE-STEP INCOME STATEMENT
For year ended March 31, 2008
Revenue from sales:
Sales 1,542,000
Less: sales returns 27,720
Sales discounts 26,280
NET SALES 1,488,000
Cost of merch. sold 930,000
Gross Profit 558,000
Operating Expenses:
Selling :
Sales salaries expenses 207,840
Advertising expense 52,560
Depr. expense – store equip. 7,680
Misc. selling expense 1,920
Total selling exp: 270,000
Administrative Exp:
Office salaries expense: 100,980
Rent expense: 37,620
Depr. expense – office equip. 15,240
Insurance expense: 4,680
Office supplies expense: 1,560
Misc. administrative expense: 1,920
Total admin. exp: 168,000
Total operating expenses: 438,000
Income from Operations 120,000
Other Income and Expense
Interest Revenue (6,000)
NET INCOME 114,000
2) STATEMENT OF OWNER’S EQUITY
For Year Ended March 31, 2008
Tiffany Garland, capital April 1, 2007 564,900
Net income for year 114,000
Less Withdrawals 42,000
Increase in Owner’s Equity 72,000

Tiffany Garland, capital March 31, 2008 636,000
3) BALANCE SHEET
March 31, 2008
ASSETS
Current Assets:
Cash 184,500
Accounts Rec. 145,200
Merch Inventory 210,000
Office supplies 6,720