P2 - Merchandise inventory, March 31, 2010 $38,200...

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Debit Credit Aug 7 Accounts Receivable 3000 Sales Revenue 3000 7 Cost of Goods Sold 1800 Merchandise Inventory 1800 8 Merchandise Inventory 6000 Accounts Payable 6000 9 Freight-In 254 Cash 254 10 Merchandise Inventory 9000 Freight-In 600 Accounts Payable 9600 14 Accounts Receivable 2400 Sales Revenue 2400 14 Cost of Goods Sold 1440 Merchandise Inventory 1440 14 Accounts Payable 600 Merchandise Inventory 600 17 Cash 3000 Accounts Receivable 3000 19 Cash 1800 Sales Revenue 1800 19 Cost of Goods Sold 1080 Merchandise Inventory 1080 20 Accounts Payable 9600 Cash 9600 21 Accounts Payable 5400 Cash 5400 24 Sale Returns and Allowances 200 Accounts Receivable 200 24 Merchandise Inventory 120 Cost of Goods Sold 120 These cash rebates should not be recorded as revenue. Not only was this cash not earned by selling goods, but it will make investors think that you have earned more money than you actually have.
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Louise's Gourmet Shop Income Statement For the Year Ended March 31, 2011 Net Sales $163,000 Cost of Goods Sold
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Unformatted text preview: Merchandise inventory, March 31, 2010 $38,200 Purchases $70,200 Less Purchases Returns and Allowances 2,600 Net Purchases $67,600 Freight-in 2,300 Store Salaries Expense 33,125 Advevtising Expense 23,800 Store Supplies Expense 2,880 Depreciation Expense - Store Equipment 1050 Net Cost of Purchases 130,755 Cost of good available for sale $168,955 Less merchandise inventory March 31, 2011 29,400 Cost of good sold 139,555 Gross Margin $23,445 Operating Expenses Office Salaries Expense 12,875 Rent Expense 2,400 Insurance Expense 1,300 Utilities Expense 1,560 Office Supplies Expense 1,075 Depreciation Expense - Office Equipment 800 Total Operation Expenses $20,010 Net Income $3,435 Profit Margin 2.1% It seems as though Loiuse's Gourmet Shop was isn't very profitably at this very moment. Their profit margin is only 2.1%....
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This note was uploaded on 01/23/2012 for the course BUS 1000 taught by Professor Annerich during the Fall '10 term at Cedarville.

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P2 - Merchandise inventory, March 31, 2010 $38,200...

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