Problem- The following accounts were taken from the ledger of Dada Merchandising as of May 31, 2012; Inventory, May 1 30,000 Inventory, May 31 80,000 Office Supplies Used 5,000 Office Supplies Inventory 6,000 Store Supplies Used 4,000 Store Supplies on Hand 6,000 Freight In 1,000 Freight Out 2,000 Dividend Income 4,000 Rent Income 6,000 Interest Expense 3,000 Purchases 350,000 Purchase Returns and Allowances 20,000 Purchase Discount 3,000 Accounts Payable 25,000 Notes Payable 15,000 Taxes Payable 3,000 Mortgage Payable 300,000 Miscellaneous Selling Expenses 7,000 Miscellaneous General Expenses 3,000 Postage and Telegraph 1,200 Sales Salaries 40,000 Office Salaries 30,000 Advertising Expense 800 Insurance- Office Building 4,000 Insurance- Store Building 6,000 Heat, Light and Power 1,400 Rent Expense 2,000 Bad Debts 1,500 Depreciation- Store Building 20,000 Depreciation- Office Building 15,000 Cash 40,000 Notes Receivable 50,000 Accounts Receivable 100,000 Allowance for Bad Debts 8,000 Store Building 400,000 Accumulated Depreciation- Store Building 40,000 Office Building 600,000 Accumulated Depreciation- Office Building 75,000 Sales 600,000 Sales Discounts 3,600 Sales Returns and Allowances 30,000 Dada, Capital 672,500 Dada, Drawing 6,000 Loss from Sale of Office Building 3,000 Required: 1. Income Statement with supporting notes

Problem- The following accounts were taken from the ledger of Dada Merchandising as of May 31, 2012; Inventory, May 1 30,000 Inventory, May 31 80,000 Office Supplies Used 5,000 Office Supplies Inventory 6,000 Store Supplies Used 4,000 Store Supplies on Hand 6,000 Freight In 1,000 Freight Out 2,000 Dividend Income 4,000 Rent Income 6,000 Interest Expense 3,000 Purchases 350,000 Purchase Returns and Allowances 20,000 Purchase Discount 3,000 Accounts Payable 25,000 Notes Payable 15,000 Taxes Payable 3,000 Mortgage Payable 300,000 Miscellaneous Selling Expenses 7,000 Miscellaneous General Expenses 3,000 Postage and Telegraph 1,200 Sales Salaries 40,000 Office Salaries 30,000 Advertising Expense 800 Insurance- Office Building 4,000 Insurance- Store Building 6,000 Heat, Light and Power 1,400 Rent Expense 2,000 Bad Debts 1,500 Depreciation- Store Building 20,000 Depreciation- Office Building 15,000 Cash 40,000 Notes Receivable 50,000 Accounts Receivable 100,000 Allowance for Bad Debts 8,000 Store Building 400,000 Accumulated Depreciation- Store Building 40,000 Office Building 600,000 Accumulated Depreciation- Office Building 75,000 Sales 600,000 Sales Discounts 3,600 Sales Returns and Allowances 30,000 Dada, Capital 672,500 Dada, Drawing 6,000 Loss from Sale of Office Building 3,000 Required: 1. Income Statement with supporting notes

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem- The following accounts were taken from the ledger of
Dada Merchandising as of May 31, 2012;

Inventory, May 1	30,000
Inventory, May 31	80,000
Office Supplies Used	5,000
Office Supplies Inventory	6,000
Store Supplies Used	4,000
Store Supplies on Hand	6,000
Freight In	1,000
Freight Out	2,000
Dividend Income	4,000
Rent Income	6,000
Interest Expense	3,000
Purchases	350,000
Purchase Returns and Allowances	20,000
Purchase Discount	3,000
Accounts Payable	25,000
Notes Payable	15,000
Taxes Payable	3,000
Mortgage Payable	300,000
Miscellaneous Selling Expenses	7,000
Miscellaneous General Expenses	3,000
Postage and Telegraph	1,200
Sales Salaries	40,000
Office Salaries	30,000
Advertising Expense	800
Insurance- Office Building	4,000
Insurance- Store Building	6,000
Heat, Light and Power	1,400
Rent Expense	2,000
Bad Debts	1,500
Depreciation- Store Building	20,000
Depreciation- Office Building	15,000
Cash	40,000
Notes Receivable	50,000
Accounts Receivable	100,000
Allowance for Bad Debts	8,000
Store Building	400,000
Accumulated Depreciation- Store Building	40,000
Office Building	600,000
Accumulated Depreciation- Office Building	75,000
Sales	600,000
Sales Discounts	3,600
Sales Returns and Allowances	30,000
Dada, Capital	672,500
Dada, Drawing	6,000
Loss from Sale of Office Building	3,000

Required:
1. Income Statement with supporting notes

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