(a) Explanation A financial statement is the complete record of financial transactions that take place in a company, at a particular period of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. Prepare the multi-step income statement of W Departmental Store. Multi-step Income Statement: A multiple step income statement refers to the income statement that shows the operating, and non-operating activities of the business, under separate head. In different steps of the multi-step income statement, principal operating activities are reported that starts from the record of sales revenue with all contra sales revenue account like sales returns, allowances and sales discounts. W Departmental Store Income Statement For the Year Ended November 30, 2017 Particulars Amount($) Amount($) Sales revenue 904,000 Less: Sales returns and allowances (20,000) Net sales 884,000 Less: Cost of goods sold (614,300) Gross profit 269,700 Less: Operating expenses: Salaries and wages expenses 117,000 Depreciation expenses 13,500 Advertising expense 33,500 Freight-out 6,200 Insurance expense 9,000 Rent expense 34,000 Utilities expense 10,600 Total operating expenses (223,800) Income from operations 45,900 Add: Other revenues and gain: Gain on disposal of plant assets 2,000 Less: Other expenses and losses: Interest expense (5,000) Income before income taxes 42,900 Less: Income tax expense (10,000) Net income 32,900 Table (1) Prepare the retained earnings statement of W Departmental Store. Retained Earnings Statement: This is a financial statement that shows the amount of net income retained by a company at a particular point of time for reinvestment, and to pay its debts, and obligations. It shows the amount of retained earnings that is not paid as dividends to shareholders. W Departmental Store Retained Earnings Statement For the Year Ended November 30, 2017 Details Amount ($) Beginning Balance of Retained earnings 14,200 Add: Net Income for the year 32,900 Total Retained Earnings 47,100 Less: Dividends (12,000) Ending balance of Retained Earnings 35,100 Table (2) Prepare the classified balance sheet of W Departmental Store... (b) To determine Determine the gross profit rate and profit margin of W Departmental Store for 2017. (c) To determine Calculate the expected new net income, revised gross profit rate, and profit margin of W Departmental Store for 2017 if net sales are increased 15%, gross profit is increased by $40,443 and expenses are increased by $58,600.

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

6th Edition

ISBN: 9781119191674

Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

Publisher: WILEY

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Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 4AP

(a)

To determine

Prepare the multi-step income statement, retained earnings statement, and classified balance sheet of W Departmental Store, for the year ended November 30, 2017.

(b)

To determine

Determine the gross profit rate and profit margin of W Departmental Store for 2017.

(c)

To determine

Calculate the expected new net income, revised gross profit rate, and profit margin of W Departmental Store for 2017 if net sales are increased 15%, gross profit is increased by $40,443 and expenses are increased by $58,600.

Expert Solution & Answer

Chapter 5 Solutions

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - Prob. 5Q Ch. 5 - Prob. 6Q Ch. 5 - Prob. 7Q Ch. 5 - Prob. 8Q Ch. 5 - Prob. 9Q Ch. 5 - Prob. 10Q

Ch. 5 - Prob. 11Q Ch. 5 - Prob. 12Q Ch. 5 - Prob. 13Q Ch. 5 - Prob. 14Q Ch. 5 - Prob. 15Q Ch. 5 - Prob. 16Q Ch. 5 - Prob. 17Q Ch. 5 - Prob. 18Q Ch. 5 - Prob. 19Q Ch. 5 - Prob. 20Q Ch. 5 - Prob. 21Q Ch. 5 - Prob. 22Q Ch. 5 - Prob. 23Q Ch. 5 - Prob. 24Q Ch. 5 - Prob. 25Q Ch. 5 - Prob. 26Q Ch. 5 - Prob. 1BE Ch. 5 - Prob. 2BE Ch. 5 - Prob. 3BE Ch. 5 - Prob. 4BE Ch. 5 - Prob. 5BE Ch. 5 - Prob. 6BE Ch. 5 - Prob. 7BE Ch. 5 - Prob. 8BE Ch. 5 - Prob. 9BE Ch. 5 - Prob. 10BE Ch. 5 - Prob. 11BE Ch. 5 - Prob. 12BE Ch. 5 - Prob. 13BE Ch. 5 - Prob. 14BE Ch. 5 - Prob. 1DIE Ch. 5 - Prob. 2DIE Ch. 5 - Prob. 3DIE Ch. 5 - Prob. 4DIE Ch. 5 - Prob. 5DIE Ch. 5 - Prob. 6DIE Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E Ch. 5 - Prob. 4E Ch. 5 - Prob. 5E Ch. 5 - Prob. 6E Ch. 5 - Prob. 7E Ch. 5 - Prob. 8E Ch. 5 - Prob. 9E Ch. 5 - Prob. 10E Ch. 5 - Prob. 11E Ch. 5 - Prob. 12E Ch. 5 - Prob. 13E Ch. 5 - Prob. 14E Ch. 5 - Prob. 15E Ch. 5 - Prob. 1AP Ch. 5 - Prob. 2AP Ch. 5 - Prob. 3AP Ch. 5 - Prob. 4AP Ch. 5 - Prob. 5AP Ch. 5 - Prob. 6AP Ch. 5 - Prob. 7AP Ch. 5 - Prob. 8AP Ch. 5 - Prob. 9AP Ch. 5 - Prob. 1CACR Ch. 5 - Prob. 2CACR Ch. 5 - Prob. 1EYCT Ch. 5 - Prob. 2EYCT Ch. 5 - Prob. 3EYCT Ch. 5 - Prob. 4EYCT Ch. 5 - Prob. 6EYCT Ch. 5 - Prob. 7EYCT Ch. 5 - Prob. 8EYCT Ch. 5 - Prob. 9EYCT Ch. 5 - Prob. 1IFRS Ch. 5 - Prob. 2IFRS Ch. 5 - Prob. 3IFRS Ch. 5 - Prob. 4IFRS

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