Matthew_McCoy_Problem 5-3A

Matthew_McCoy_Problem 5-3A - To account for expired portion...

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Matthew McCoy Problem 5-3A General Journal Jan. 31 (a)Store supplies expense 2,950 Store supplies Jan. 31 (b)Insurance expense 1,450 Prepaid insurance Jan. 31 ( c)Depreciation expense-Store equipment 1,975 Accumulated depreciation-Store equipment Jan. 31 (d)Cost of goods sold 2,700 Merchandise inventory HELIX COMPANY Income Statement For year ended January 31, 2009 Sales Less: Sales discounts 1,900 Sales returns and allowances 2,300 Net Sales Cost of goods sold Gross profit Operating expenses Selling expenses Depreciation expense- Store equipment 1,975 Sales salaries expense 13,700 Rent expense- Selling space 7,500 Advertising expense 9,700 Store supplies expense 2,950 Total selling expenses 35,825 General and administrative expenses Office salaries expense 13,700 Insurance expense 1,450 Rent expense- Office space 7,500 Total general and administrative expenses 22,650 Income from operations Other revenues and gains (expenses and losses) Total other revenues and gains (expenses and losses) Net income To account for store supplies no longer available.
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Unformatted text preview: To account for expired portion of prepaid insurance. For depreciation on store equipment. To adjust for $2,700 shrinkage revealed by a physical count of inventory. Total operating expenses HELIX COMPANY Income Statement For year ended January 31, 2009 Revenues Net Sales Total revenues Expenses Cost of goods sold 40,700 Selling expenses 35,825 General and administrative expenses 22,650 Total expenses Net income Current ratio= Current assets/ Current liabilities Current ratio= 63950/14000= 4.6 Acid-test ratio= (Cash and equivalents + Short-term investments + Current receivables)/ Current liabilities Acid-test ratio= Cash / Accounts payable = 28,750/14,000= 2.05 Gross margin ratio= Gross profit/ Net sales = 70,900/ 111,600= 0.64 2,950 1,450 1,975 2,700 115,800 4,200 111,600 40,700 70,900 58,475 12,425 12,425 111,600 111,600 99,175 12,425 (or 64%)...
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Matthew_McCoy_Problem 5-3A - To account for expired portion...

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