5th Edition

ISBN: 9780134728643

Author: Robert Kemp; Jeffrey Waybright

Publisher: Pearson Education (US)

Concept explainers

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

Videos

Textbook Question

Chapter 4, Problem 22AE

Preparing a single-step income statement (Learning Objective 6) 10-15 min.

The account balances for Spark’s Electrical Supply, Inc., for the year ended August 31, 2018, are presented next in random order:

Cash......................................................	$ 6,450
Equipment............................................	48,800
Accounts Payable.................................	5,800
Common Stock....................................	35,000
Long-Term Notes Payable...................	10,000
General Expenses................................	24,500
Salaries Payable..................................	1,450
Supplies..............................................	950
Building..............................................	135,000
Estimated Refund Liability...................	2,300
Prepaid Rent.........................................	1,750
Interest Expense....................................	750
Retained Earnings.................................	40,450

Cost of Goods Sold.....................................................	$123,700
Accumulated Depreciation, Equipment......................	13,700
Unearned Revenues....................................................	2,350
Sales Revenue.............................................................	271,600
Accounts Receivable.....................................................	5,100
Accumulated Depreciation, Building............................	38,000
Mortgage Payable (Long-Term)...................................	25,900
Dividends.......................................................................	45,000
Estimated Inventory Returns.........................................	1,500
Selling Expenses............................................................	37,000
Inventory.......................................................................	16,050

Requirements

1. Prepare Spark’s Electrical Supply, Inc.’s single-step income statement.
2. Would you recommend the use of the single-step income statement format by a merchandiser? Why?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 4, Problem 21AE

Chapter 4, Problem 23AE

Students have asked these similar questions

Saved Required information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,310 in assets to launch the business. On December 31, the company's records show the following items and amounts. $ 10,200 Cash withdrawals by owner Cash Accounts receivable 15,200 Consulting revenue Office supplies 3,550 Rent expense Land 45,990 Office equipment 18,310 Accounts payable 8,740 Salaries expense Telephone expense Miscellaneous expenses Owner investments 84,310 $ 2,340 15,200 3,910 7,350 790 610 Use the above information to prepare a December 31 balance sheet for Ernst Consulting. AC Graw Hill ERNST CONSULTING Balance Sheet December 31 $ 0 G-SYNC $ 0 S 0 B

Audit, Fraud, Or Forensic Accounting Introduce yourself to your peers by sharing something unique about your background. Explain how you expect this course will help you move forward in your current or future career. This course covers forensic accounting, so it's important to establish the differences between an audit, a fraud examination, and a forensic accounting engagement. Think about the fraud conviction of Elizabeth Holmes, as described in the video, "Elizabeth Holmes Found Guilty in Theranos Fraud Trial." Then respond to the following: Imagine you are assigned to the Theranos case. Write the first five questions you would ask if you were an auditor, the first five questions as a fraud examiner, and the first five as a forensic accountant. After your questions, explain why the questions and approaches are different among the three roles. Be sure to respond to at least one of your classmates' posts.

Financial Account subject

Chapter 4 Solutions

Financial Accounting

Ch. 4 - Prob. 1DQ Ch. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQ Ch. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ

Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SC Ch. 4 - Prob. 4SC Ch. 4 - Prob. 5SC Ch. 4 - Prob. 6SC Ch. 4 - Prob. 7SC Ch. 4 - Prob. 8SC Ch. 4 - Prob. 9SC Ch. 4 - Prob. 10SC Ch. 4 - Prob. 11SC Ch. 4 - Prob. 12SC Ch. 4 - Inventory methods (Learning Objective 2) 5-10 min....Ch. 4 - Prob. 2SE Ch. 4 - Prob. 3SE Ch. 4 - Prob. 4SE Ch. 4 - Prob. 5SE Ch. 4 - Prob. 6SE Ch. 4 - Prob. 7SE Ch. 4 - Journalizing sales and return transactions...Ch. 4 - Prob. 9SE Ch. 4 - Prob. 10SE Ch. 4 - Prob. 11SE Ch. 4 - Prob. 12SE Ch. 4 - Calculating gross profit percentage and net income...Ch. 4 - Prob. 14AE Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 16AE Ch. 4 - Prob. 17AE Ch. 4 - Prob. 18AE Ch. 4 - Prob. 19AE Ch. 4 - Prob. 20AE Ch. 4 - Prob. 21AE Ch. 4 - Preparing a single-step income statement (Learning...Ch. 4 - Prob. 23AE Ch. 4 - Prob. 24AE Ch. 4 - Prob. 25AE Ch. 4 - Prob. 26BE Ch. 4 - Prob. 27BE Ch. 4 - Prob. 28BE Ch. 4 - Prob. 29BE Ch. 4 - Prob. 30BE Ch. 4 - Journalizing inventory sales, returns, and freight...Ch. 4 - Prob. 32BE Ch. 4 - Prob. 33BE Ch. 4 - Prob. 34BE Ch. 4 - Prob. 35BE Ch. 4 - Prob. 36BE Ch. 4 - Prob. 37BE Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 39AP Ch. 4 - Prob. 40AP Ch. 4 - Prob. 41AP Ch. 4 - Prob. 42AP Ch. 4 - Prob. 43AP Ch. 4 - Prob. 44AP Ch. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 46BP Ch. 4 - Prob. 47BP Ch. 4 - Journalizing inventory purchases, sales, returns,...Ch. 4 - Prob. 49BP Ch. 4 - Prob. 50BP Ch. 4 - Prob. 51BP Ch. 4 - Prob. 1CE Ch. 4 - Continuing Problem In this problem, we continue...Ch. 4 - Continuing Financial Statement Analysis Problem...Ch. 4 - Prob. 1EIA Ch. 4 - Prob. 2EIA Ch. 4 - Prob. 1FA Ch. 4 - Prob. 1IA Ch. 4 - Prob. 1SBA Ch. 4 - Prob. 1WC

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Solution Summary: The author recommends the use of the single-step income statement format for merchandisers, as it provides detailed financial information to its users.

Concept explainers

Videos

Want to see the full answer?

Chapter 4 Solutions