College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 25, Problem 1SEA
GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST ATE MENT Bill Walters and Alice Jennings are partners in a business called Walters and Jennings Sportswear that sells athletic footwear. They have organized the business on a departmental basis as follows: running shoes, walking shoes, and specialty shoes. At the end of the first year of operation, the sales and cost of goods sold for the three departments are as follows:
Prepare the gross profit section of a departmental income statement for the year ended December 31, 20--. Show the gross profit for each department and for the business in total.
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Accordingly, 15% of rent, depreciation, and utility expenses pertain to the sales office while the rest pertains to the corporate office.
Questions:
How much is the net sales for the year?
How much is the cost of sales for the year?
How much is the gross profit for the year?
How much is the net income for the year?
Prepare a statement of comprehensive income.
Prepare a financial statement.
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the
expenditure of an additional $50,000 for advertising. At the end of the year, Willie Green,
the president, is presented with the following condensed comparative income statement:
Tri-Comic Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total operating expenses
Income from operations
Other revenue
Income before income tax
Income tax expense
Net income
Required:
2012
$1,500,000
510,000
$990,000
$270,000
180,000
$450,000
$540,000
60,000
$600,000
450,000
$150,000
20Y1
$1,250,000
475,000
$775,000
$200,000
156,250
$356,250
$418,750
50,000
$468,750
375,000
$93,750
Required:
Prepare a comparative income statement for the two-year period, presenting an
analysis of each item in relationship to sales for each of the years. Round to one
decimal place. Enter all amounts as positive numbers.
The Officers of the Company reviewed the profitability of the company's four products and the potential effect of several proposals for varying the product mix. An excerpt from the year's income statement and other date follows:
Total
P
Q
R
S
Sales
P62,600
P10,000
P18,000
P12,600
P22,000
Cost of Goods Sold
44,274
4,750
7,056
13,968
18,500
Gross Profit
P18,326
P5,250
P10,944
P(1,368)
P3,500
Operating Expense
12,012
1,990
2,976
2,826
4,220
Profit before
income tax
P6,314
P3,260
P7,968
P(4,194)
P(720)
Units Sold
1,000
1,200
1,800
2,000
Sales Price Per Unit
P10.00
P15.00
P7.00
P11.00
Variable Cost of goods
sold per unit
P2.50
P3.00
P6.50
P6.00
Variable operating
expense per unit
P1.17
P1.25
P1.00
P1.20
The total fixed cost is not expected to fluctuate as a result of changes under consideration.
Required:…
Chapter 25 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 25 - A department that incurs costs and generates...Ch. 25 - Departmental gross profit is the difference...Ch. 25 - Prob. 3TFCh. 25 - Direct expenses are operating expenses incurred...Ch. 25 - Departmental direct operating margin is the...Ch. 25 - Prob. 1MCCh. 25 - The difference between a departments net sales and...Ch. 25 - Prob. 3MCCh. 25 - The difference between a departments gross profit...Ch. 25 - The difference between a departments gross profit...
Ch. 25 - Prob. 1CECh. 25 - Prob. 2CECh. 25 - Prob. 3CECh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Distinguish between departmental gross profit,...Ch. 25 - Prob. 10RQCh. 25 - GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST...Ch. 25 - ALLOCATING OPERATING EXPENSESQUARE FEET Weaverling...Ch. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Mercado...Ch. 25 - COMPUTING OPERATING INCOME The sales, cost of...Ch. 25 - Prob. 6SEACh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - INCOME STATE MENT WITH DEPARTMENTAL OPERATING...Ch. 25 - INCOME STATEMENT WITH DEPART MENTAL DIRECT...Ch. 25 - Prob. 10SPACh. 25 - GROSS PROFIT SECTION OF DEPART MENTAL INCOME...Ch. 25 - Prob. 2SEBCh. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert...Ch. 25 - Prob. 5SEBCh. 25 - Prob. 6SEBCh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - Prob. 8SPBCh. 25 - Prob. 9SPBCh. 25 - Prob. 10SPBCh. 25 - Prob. 1MYWCh. 25 - Prob. 1ECCh. 25 - MASTERY PROBLEM Bobs Acme Supermarket has been in...Ch. 25 - CHALLENGE PROBLEM This problem challenges you to...
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