Solution-Make a partial multiple-step income statement

Make a partial multiple-step income statement

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Reference no: EM132430512

Question - The following transactions occurred in April and May. Both companies use a perpetual inventory system.

Apr. 5 Crane Company purchased merchandise from DeVito Company for $12,400, terms 2/10, n/30, FOB shipping point. DeVito had paid $8,100 for the merchandise.

Apr. 6 The correct company paid freight costs of $330.

Apr. 8 Crane Company returned damaged merchandise to DeVito Company and was given a purchase allowance of $1,700. DeVito determined the merchandise could not be repaired and sent it to the recyclers. The merchandise had cost DeVito $1,230.

May 4 Crane paid the amount due to DeVito Company in full.

Required -

a) Prepare the journal entries to record the above transactions for Crane Company.

b) Prepare the journal entries to record the above transactions for Devito Company.

c) Make a partial multiple-step income statement, up to gross profit.

Reference no: EM132430512

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Make a partial multiple-step income statement

Reference no: EM132430512

Reference no: EM132430512

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