Question

Questions

1. Jones Company is a merchandise company that uses the perpetual inventory method.  The business prepares financial statements on a monthly basis and has the following adjusted trial balance at January 31:

8,000       Cash                                        10,000       Notes payable (all long-term)

11,000     Accounts receivable                   42,600       Owner’s capital, January 1

22,500     Merchandise inventory                4,000        Owner’s withdrawals

34,200     Equipment                                314,700    Sales revenue

7,400       Accumulated depreciation            230,400     Cost of goods sold

5,800       Accounts payable                       71,400      Operating expenses

1,000       Wages payable

1. Prepare a MUTLIPLE STEP income statement for Jones Company IN GOOD FORMAT for January.

2. Prepare a statement of owner’s equity for Jones Company IN GOOD FORMAT for January.

C. Prepare a classified balance sheet for Jones Company IN GOOD FORMAT for January.

2. A business that uses the perpetual inventory method has the following financial data regarding its merchandise inventory for January:

      Beginning inventory                    20 units at $5.00 each       

      January 1:  Purchase                    50 units at $5.50 each

      January 5:  Purchase                    60 units at $6.00 each

      Ending inventory                         35 units

All January sales occurred after January 5.

1. Determine COST OF GOODS SOLD for January under FIFO.
2. Determine COST OF GOODS SOLD for January under LIFO.

Answer 1

A.

Jones Company
Income Statement for month January
Particulars	Amount ($)
Income:
Sales Revenue	3,14,700.00
Sub-total (A)	3,14,700.00
Expenses:
Cost of Goods Sold	2,30,400.00
Operating Expenses	71,400.00
Sub-total (B)	3,01,800.00
Net Income (A-B)	12,900.00

B.

Jones Company
Statement of Owners Equity for Month Ended January, 31
Particulars	Amount ($)
Owners Capital as on January ,1	42,600.00
Add: Net Income druing January	12,900.00
Sub-total	55,500.00
Less: Withdrawals during the year	4,000.00
Owners Capital as on January ,31	51,500.00

C.

Jones Company
Balancesheet as on January 31
Liablities	Amount ($)	Asset	Amount ($)
Owner's Capital	51,500.00	Equipment                34200
		(-)Acc. Depreciation 7400	26,800.00
Notes Payable	10,000.00
Accounts Payable	5,800.00	Merchnadise Inventory	22,500.00
Wages Payable	1,000.00	Accounts receivable	11,000.00
		Cash	8,000.00
Total	68,300.00	Total	68,300.00