Multiple-Step Income Statement On March 31, 20Y9, the balances of the accounts appearing in the ledger...

Multiple-Step Income Statement

On March 31, 20Y9, the balances of the accounts appearing in the ledger of Royal Furnishings Company, a furniture store, are as follows:

Accounts Receivable	$170,000	Inventory	$1,019,950
Accumulated Depreciation—Building	762,600	Notes Payable	273,300
Administrative Expenses	559,700	Office Supplies	19,950
Building	2,619,300	Retained Earnings	1,337,850
Cash	166,750	Salaries Payable	7,900
Common Stock	291,750	Sales	6,440,950
Cost of Goods Sold	3,769,900	Selling Expenses	709,650
Dividends	172,550	Store Supplies	93,100
Interest Expense	10,150

a. Prepare a multiple-step income statement for the fiscal year ended March 31, 20Y9.

Royal Furnishings Company
Income Statement
For the Year Ended March 31, 20Y9
Sales		$
Cost of goods sold
Gross profit		$
Expenses:
Selling expenses	$
Administrative expenses
Total expenses
Operating income		$
Other expense:
Interest expense
Net income		$

Beginning inventory, purchases, and sales for an inventory item are as follows:

Sep. 1	Beginning Inventory	24	units	@	$21
5	Sale	14	units
17	Purchase	26	units	@	$23
30	Sale	27	units

Assuming a perpetual inventory system and the first-in, first-out method:

a. Determine the cost of the goods sold for the September 30 sale.
$

b. Determine the inventory on September 30.
$

Asset turnover ratio

Financial statement data for years ended December 31, 20Y3 and 20Y2, for Edison Company follow:

	20Y3	20Y2
Sales	$1,749,000	$1,512,000
Total assets:
Beginning of year	770,000	670,000
End of year	820,000	770,000

a.	Determine the asset turnover ratio for 20Y3 and 20Y2. Round answers to one decimal place.

	20Y3		20Y2
Asset turnover

b.	Is the change in the asset turnover ratio from 20Y2 to 20Y3 favorable or unfavorable?

Solutions

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