Appendix 2 PR 5-10A Periodic inventory accounts, multiple-step income statement, closing entries On December 31, 20Y5, the balances of the accounts appearing in the ledger of Wyman Company are as follows: $ 13,500 72,000 257,000 Purchases Cash Dividends $ 25,000 Accounts Receivable Sales 3,280,000 Inventory, January 1, 20Y5 2,650,000 Estimated Returns Inventory, Purchases Returns and Allowances 93,000 January 1, 20Y5 35,000 Purchases Discounts 37,000 3,000 Freight In Office Supplies Prepaid Insurance Land 48,000 Sales Salaries Expense 150,000 Advertising Expense 270,000 Delivery Expense 4,500 300,000 45,000 Store Equipment 9,000 Accumulated Depreciation- Store Equipment Office Equipment Accumulated Depreciation- Office Equipment Accounts Payable Salaries Payable Customer Refunds Payable Depreciation Expense- Store Equipment 78,500 Miscellaneous Selling Expense Office Salaries Expense 55,900 6,000 12,000 175,000 16,000 Rent Expense 77,800 Insurance Expense 3,000 Office Supplies Expense 50,000 Depreciation Expense- Office Equipment 28,000 3,000 2,000 Unearned Rent 8,300 1,500 Notes Payable 50,000 Miscellaneous Administrative Expense 3,500 Common Stock 150,000 Rent Revenue 7,000 Retained Earnings 365,600 Interest Expense 2,000
Appendix 2 PR 5-10A Periodic inventory accounts, multiple-step income statement, closing entries On December 31, 20Y5, the balances of the accounts appearing in the ledger of Wyman Company are as follows: $ 13,500 72,000 257,000 Purchases Cash Dividends $ 25,000 Accounts Receivable Sales 3,280,000 Inventory, January 1, 20Y5 2,650,000 Estimated Returns Inventory, Purchases Returns and Allowances 93,000 January 1, 20Y5 35,000 Purchases Discounts 37,000 3,000 Freight In Office Supplies Prepaid Insurance Land 48,000 Sales Salaries Expense 150,000 Advertising Expense 270,000 Delivery Expense 4,500 300,000 45,000 Store Equipment 9,000 Accumulated Depreciation- Store Equipment Office Equipment Accumulated Depreciation- Office Equipment Accounts Payable Salaries Payable Customer Refunds Payable Depreciation Expense- Store Equipment 78,500 Miscellaneous Selling Expense Office Salaries Expense 55,900 6,000 12,000 175,000 16,000 Rent Expense 77,800 Insurance Expense 3,000 Office Supplies Expense 50,000 Depreciation Expense- Office Equipment 28,000 3,000 2,000 Unearned Rent 8,300 1,500 Notes Payable 50,000 Miscellaneous Administrative Expense 3,500 Common Stock 150,000 Rent Revenue 7,000 Retained Earnings 365,600 Interest Expense 2,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I wanna know how to calculateincrease in estimated returns inventory.
Transcribed Image Text:Appendix 2
PR 5-10A Periodic inventory accounts, multiple-step
income statement, closing entries
On December 31, 20Y5, the balances of the accounts
appearing in the ledger of Wyman Company are as
follows:
Cash
$ 13,500
Dividends
$ 25,000
Accounts Receivable
72,000
Sales
3,280,000
Inventory, January 1, 20Y5
Estimated Returns Inventory,
257,000
Purchases
2,650,000
Purchases Returns and Allowances
93,000
January 1, 20Y5
35,000
Purchases Discounts
37,000
Office Supplies
Prepaid Insurance
3,000 Freight In
48,000
Sales Salaries Expense
150,000 Advertising Expense
4,500
300,000
Land
45,000
270,000 Delivery Expense
Store Equipment
Accumulated Depreciation-
Store Equipment
Office Equipment
9,000
Depreciation Expense-
Store Equipment
Miscellaneous Selling Expense
Office Salaries Expense
55,900
6,000
78,500
12,000
Accumulated Depreciation-
Office Equipment
Accounts Payable
Salaries Payable
Customer Refunds Payable
175,000
16,000 Rent Expense
77,800 Insurance Expense
28,000
3,000
Office Supplies Expense
Depreciation Expense-
Office Equipment
Miscellaneous Administrative Expense
3,000
2,000
50,000
Unearned Rent
8,300
1,500
Notes Payable
50,000
3,500
Common Stock
150,000
Rent Revenue
7,000
Retained Earnings
365,600 Interest Expense
2,000
Transcribed Image Text:Instructions
1. Does Wyman Company use a periodic or perpetual
inventory system? Explain.
2. Prepare a multiple-step income statement for
Wyman Company for the year ended December 31,
20Y5. The inventory as of December 31, 20Y5, was
$305,000. The estimated cost of customer returns
inventory for December 31, 20Y5, is estimated to
increase to $40,000.
3. Prepare the closing entries for Wyman Company as
of December 31, 20Y5.
4. What would be the net income if the perpetual
inventory system had been used?
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