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Prepare a detailed income statement
Course:- Accounting Basics
Reference No.:- EM131722670




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PROBLEM

Le Bere Office Supplies Company
Work Sheet
For the Year Ended September 30, 19x4

 

Trial Balance

Adjustments

Income Statement

Balance Sheet

Account Name

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Cash

21,150

 

 

 

 

 

21,150

 

Accounts Receivable

74,490

 

 

 

 

 

74,490

 

Merchandise Inventory

214,200

 

 

 

214,200

266,700

266,700

 

Store Supplies

11,400

 

 

(a)    9,750

 

 

1,650

 

Prepaid Insurance

14,400

 

 

(b)   7,200

 

 

7,200

 

Store Equipment

253,900

 

 

 

 

 

253,900

 

Accumulated Depreciation Store Equipment

 

76,500

 

(c)   15,000

 

 

 

91,500

Accounts Payable

 

116,850

 

(e)           300

 

 

 

117,150

Grace Le Bere, Capital

 

484,050

 

 

 

 

 

484,050

Grace Le Bere, Withdrawals

72,000

 

 

 

 

 

72,000

 

Sales

 

1,225,750

 

 

 

1,225,750

 

 

Sales Returns and
Allowances

25,440

 

 

 

25,440

 

 

 

Purchases

754,800

 

 

 

754,800

 

 

 

Purchases Returns and Allowances

 

18,150

 

 

 

18,150

 

 

Freight In

31,200

 

 

 

31,200

 

 

 

Sales Salaries Expense

193,800

 

(d) 1,950

 

195,750

 

 

 

Rent Expense

144,000

 

 

 

144,000

 

 

 

Other Selling Expenses

98,730

 

 

 

98,730

 

 

 

Utilities Expense

11,790

 

(e)  300

 

12,090

 

 

 

 

1,921,300

1,921,300

 

 

 

 

 

 

Store Supplies Expense

(a) 9,750

 

9,750

 

 

 

Insurance Expense

(b) 7,200

 

7,200

 

 

 

Depreciation Expense,
Store Equipment

(c) 15,000

 

15,000

 

 

 

Sales Salaries Payable

 

(d) 1,950

 

 

 

1,950

 

34 200

34,200

1,508,160

1,510,600

697,090

694,650

Net Income

 

 

 

 

 

 

1. Complete the totals in columns 5 through 8 of the worksheet.

2. Prepare a detailed Income Statement [see the format on page 281 (Exhibit 10) and 291 (Exhibit 16) of the textbook as an example].

Prepare both Exhibits for your quiz.

3. Compute the Gross Profit (GP) ratio and the Inventory Turnover. See pgs 340 - 344 (Chp 7).

(a) GP = Net Sales - COGS (pages 265 & 282). GP ratio = "Gross Profit" / "Net Sales".

4. Prepare the closing entries (assume periodic 'inventory). See pages 291 - 292.

NOTE: The Merchandise Inventory amounts in the Income Statement and Balance Sheet of the worksheet $214,288 (Beg Inv.) and $266,700 (End Inv). See pages 289-292 of textbook.




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