The owner of a local souvenir shop in Murrells Inlet is in the process of preparing an income statement at the end of the first year of operation. Because it is the first year of operation, there was no inventory at the beginning of the year. Given the following information: Merchandise Inventory end of year $20,000Purchases $100,000Freight - in - $4,000Sales $200,000Property Taxes - Store $8,000Depreciation - Store $25,000Insurance Store $7,000Salary - Sales Staff $20,000Advertising $5,000What is the gross margin? -

The owner of a local souvenir shop in Murrells Inlet is in the process of preparing an income statement at the end of the first year of operation. Because it is the first year of operation, there was no inventory at the beginning of the year. Given the following information: Merchandise Inventory end of year $20,000Purchases $100,000Freight - in - $4,000Sales $200,000Property Taxes - Store $8,000Depreciation - Store $25,000Insurance Store $7,000Salary - Sales Staff $20,000Advertising $5,000What is the gross margin? -

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

See similar textbooks

Similar questions

John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided on page 561. Year-end adjustment data for the Waikiki Surf Shop are shown below. Neff uses the periodic inventory system. Year-end adjustment data are as follows: (a, b)A physical count shows that merchandise inventory costing 51,800 is on hand as of December 31, 20--. (c, d, e)Neff estimates that customers will be granted 2,000 in refunds of this years sales next year and the merchandise expected to be returned will have a cost of 1,200. (f)Supplies remaining at the end of the year, 600. (g)Unexpired insurance on December 31, 2,600. (h)Depreciation expense on the building for 20--, 5,000. (i)Depreciation expense on the store equipment for 20--, 3,000. (j)Wages earned but not paid as of December 31, 1,800. (k)Neff also offers boat rentals which clients pay for in advance. Unearned boat rental revenue as of December 31 is 3,000. Required 1. Prepare a year-end spreadsheet. 2. Journalize the adjusting entries. 3. Compute cost of goods sold using the spreadsheet prepared for part (1).
Houghton Limited is trying to determine the value of its ending inventory as of February 28. 2022, the company's year-end. The following transactions occurred, and the accountant asked your help in determining whether they should be recorded or not. For each of the transactions below, specify whether the item in question should be included in ending inventory, and if so, at what amount. On February 26, Houghton shipped goods costing $800 to a customer and charged the customer $1,000. The goods were shipped with terms FOB shipping point and the receiving reportindicates that the customer received the goods on (a) Not Included March 2 On February 26. Crain Inc shipped goods to Houghton under terms FOB shipping point. The invoice price was S600 plus $40 for freight. The receiving report indicates that the goods were received by Houghton on March 2. (b) ncluded Houghton had $750 of inventory isolated in the warehouse The inventory is designated for a customer who has requested that the…
Ramir Alindogan Catering 's Inventory showed a balance of P100,000 before the year-end adjustments. The physical count of goods on hand totaled P97,000. What account would Ramir Alindigan close at the end of the year? Accounts Receivable Accounts Payable Inventory Cost of Goods Sold
Patricia Flynn owns a business called Patty's Place. The company uses a periodic inventory system. The beginning inventory balance was $31,000. A physical count determined her ending inventory was $25,000. Based on past experience, Patricia estimates that $3,000 of sales from this year will be returned next year. The cost of the merchandise expected to be returned is $900. Which of the following journal entries would record the ending inventory? a.Debit Income Summary for $25,000 and credit Merchandise Inventory for $25,000 b.Debit Income Summary for $6,000 and credit Merchandise Inventory for $6,000 c.Debit Merchandise Inventory for $6,000 and credit Cost of Goods Sold for $6,000 d.Debit Merchandise Inventory for $25,000 and credit Income Summary for $25,000
At the beginning of the year, Snaplt had $11,800 of inventory. During the year, Snaplt purchased $38,600 of merchandise and sold $32,700 of merchandise. A physical count of inventory at year-end shows $12,800 of inventory exists. Prepare the entry to record inventory shrinkage. View transaction list Journal entry worksheet < 1 Record the inventory shrinkage. Note: Enter debits before credits. Date December 31 General Journal Debit Credit
At the end of the year, the following adjustments (a)–(j) need to be made: (a, b) Merchandise inventory as of December 31, $19,700.(c, d, e) Jones estimates that customers will be granted $400 in refunds of this year’s sales next year, and the merchandise expected to be returned will have a cost of $300.(f) Unused supplies on hand, $525.(g) Unexpired insurance on December 31, $1,000.(h) Depreciation expense on the building for the year, $800.(i) Depreciation expense on the store equipment for the year, $450.(j) Wages earned but not paid as of December 31, $330.journalise and post adjusting entries.
Freedman Company estimates that sales this year of $12,000 will be returned next year and customers will be granted a full refund. Which of the following journal entries would Freedman Company record as part of its year-end adjustments assuming it uses the perpetual inventory system? a.Debit Estimated Returns Inventory for $12,000 and credit Income Summary for $12,000 b.Debit Sales Returns and Allowances for $12,000 and credit Cost of Goods Sold for $12,000 c.Debit Inventory Short and Over for $12,000 and credit Merchandise Inventory for $12,000 d.Debit Sales Returns and Allowances for $12,000 and credit Customer Refunds Payable for $12,000
Boyle Company uses the perpetual inventory system. At the end of the current fiscal year, the company's ledger for merchandise inventory has a balance of $25,000. The company takes a physical inventory count at the end of the year and the value of the inventory counted totals $23,250. What adjustment, if any, is required at the end of the period? a. No entry is required. b. Debit Merchandise Inventory for $1,750 and credit Inventory Short and Over for $1,750 c. Debit Inventory Short and Over for $1,750 and credit Merchandise Inventory for $1,750 d. Debit Income Summary for $1,750 and credit Merchandise Inventory for $1,750
A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2021 $1,900,000Purchases to date 5,800,000Freight-in 400,000Sales to date 8,200,000 The gross profit ratio has averaged 20% of sales for the past four years.Required:Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
Stallman Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count as $25,000 of gods purchased from Pelzer Corporation, f.o.b. shipping point and $22,000 of goods sold to Alvarez Company for $30,000 f.o.b. destination. Both the Pelzer purchase and the Alvarez sale were reported in transit at year end. What amount should Stallman report as its December 31, intentory? O $220,000 O $200,000
Wormold Industries suffered a fire in its warehouse on March 4, 2021. The warehouse was fullof finished goods, and after reviewing the damage, management determined that inventory,with a retail selling price of $90,000, was not damaged by the fire.For the period from January 1, 2021, to March 4, 2021, accounting records showed thefollowing: Purchases $650,000Purchase returns 16,000Sales revenue 955,000 The inventory balance on January 1, 2021, was $275,000, and the company has historicallyearned a gross profit percentage of 35%.Required: Use the gross profit method to determine the cost of inventory damaged by the fire.
Denger