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
