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. To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

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Answer 1

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Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

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Tungsten, Inc. manufactures both normal and premium tube lights. The company allocates manufacturing over machine hours as the allocation base. Estimated overhead costs for the year are $108,000. Additional estimated information is given below. Machine hours (MHr) Direct materials Normal 23,000 $60,000 Premium 31,000 $480,000 Calculate the predetermined overhead allocation rate. (Round your answer to the nearest cent.) OA. $4.70 per direct labor hour OB. $3.48 per machine hour OC. $2.00 per machine hour OD. $0.20 per direct labor hour

< Factory Utilities Indirect Materials Used $1,300 34,500 Direct Materials Used 301,000 Property Taxes on Factory Building 5,100 Sales Commissions 82,000 Indirect Labor Incurred 25,000 Direct Labor Incurred 150,000 Depreciation on Factory Equipment 6,300 What is the total manufacturing overhead?

Answer 2

Question

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

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Answer 3

Question

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

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Answer 4

Question

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

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Answer 5

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

Answer 6

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

Answer 7

Chapter 5, Problem 5.10APR

(1)

To determine

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.

To Explain: Whether Company W use a periodic inventory system or perpetual inventory system.

Answer 8

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

Answer 9

(2)

To determine

To Prepare: The income statement of Company W for the year ended December 31, 2019.

Answer 10

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

Answer 11

3.

To determine

Closing entries: These refers to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company W.

Answer 12

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

Answer 13

4.

To determine

To Mention: The net income of W Company under the perpetual inventory system.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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Solution Summary: The author explains that a multi-step income statement shows the operating, and non-operating activities of the business under separate heads.

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To Prepare: The income statement of Company W for the year ended December 31, 2019.

To Mention: The net income of W Company under the perpetual inventory system.

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Chapter 5 Solutions