Exercise One: SKY Company uses periodic inventory system and reported the following information related to its merchandising activity for the first Quarter of 2014: Account Balance Account Title $ 30,000 Depreciation expense 10,000 Freight-in 48,000 Gain from selling an equipment Interest expense 12,000 Interest revenue 10,000 Merchandise inventory, March 31 50,000 Merchandise inventory, January 1 30,000 Purchase discount 5,000 Purchase returns and allowances 7,000 Purchases 220,000 Salaries expense 40,000. Sales discounts 20,000 Sales returns and allowances 18,000 Sales revenue 360,000 Utilities expense 10,000 Instructions: 1) Prepare a cost of goods sold schedule. 2) Prepare a multiple step income statement assuming that COGS is $198.000.
Exercise One: SKY Company uses periodic inventory system and reported the following information related to its merchandising activity for the first Quarter of 2014: Account Balance Account Title $ 30,000 Depreciation expense 10,000 Freight-in 48,000 Gain from selling an equipment Interest expense 12,000 Interest revenue 10,000 Merchandise inventory, March 31 50,000 Merchandise inventory, January 1 30,000 Purchase discount 5,000 Purchase returns and allowances 7,000 Purchases 220,000 Salaries expense 40,000. Sales discounts 20,000 Sales returns and allowances 18,000 Sales revenue 360,000 Utilities expense 10,000 Instructions: 1) Prepare a cost of goods sold schedule. 2) Prepare a multiple step income statement assuming that COGS is $198.000.
Chapter1: Financial Statements And Business Decisions
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
Transcribed Image Text:Exercise One:
SKY Company uses periodic inventory system and reported the following information related to its
merchandising activity for the first Quarter of 2014:
Account Balance
Account Title
$ 30,000
Depreciation expense
10,000
Freight-in
48,000
Gain from selling an equipment
Interest expense
12,000
Interest revenue
10,000
Merchandise inventory, March 31
50,000
Merchandise inventory, January 1
30,000
Purchase discount
5,000
Purchase returns and allowances
7,000
Purchases
220,000
Salaries expense
40,000.
Sales discounts
20,000
Sales returns and allowances
18,000
Sales revenue
360,000
Utilities expense
10,000
Instructions:
1) Prepare a cost of goods sold schedule.
2) Prepare a multiple step income statement assuming that COGS is $198,000.
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