Question

1.Using the following information, what is the amount of gross profit?

Purchases	$32,000		Purchases discounts	$960
Merchandise inventory September 1	5,700		Merchandise inventory September 30	6,370
Sales returns and allowances	910		Sales	63,000
Purchases returns and allowances	1,200		Freight In	1,040

		$34,870
		$31,880
		$27,460
		$62,090 2. Use the following worksheet to answer the following questions. Finley Company Worksheet For the Year Ended December 31, 2014 Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Withdrawals 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 The journal entry to close revenues would be: debit Income Summary $155,000, credit Fees Earned $155,000 debit C. Finley, Capital $155,000, credit Fees Earned $155,000 debit Fees Earned $155,000; credit Income Summary $155,000 credit Fees Earned $155,000; credit C. Finley, Capital $155,000 3 Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of goods sold is $24,500.   What is the amount of gross profit earned by Abbey Co. on the above transactions? 10,500 30,772 7,972 31,400 4. Use the following worksheet to answer the following questions. Finley Company Worksheet For the Year Ended December 31, 2014 Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Withdrawals 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the entry to close expenses would be: Wages Expense             63,000 Rent Expense                27,000 Depreciation Expense    15,000                   Income Summary       105,000 Expenses                      105,000                   Income Summary         105,000 Wages Expense              63,000 Rent Expense                 27,000 Depreciation Expense     15,000                    C. Finley,Withdrawals    105,000 Income Summary           105,000                   Wages Expense            63,000                   Rent Expense               27,000                   Depreciation Expense   15,000

Answer 1

1)	sales				63000
	less:Sales return and allowance				910
	net sales					62090
	cost of goods sold
	beginning inventory				5,700
	net purchases
	purchases			32,000
	less purchase return & allowance			1,200
	less"purchase discounts			960
	add:Freight in			1040
	net purchases				30,880
	total goods available for sale				36,580
	less:ending inventory				6,370
	cost of goods sold					30,210
	Gross profit					31,880	answer
2)	Debit fees earned 155,000 ;credit income summary 155,000
3)	Gross profit
	sales				35,000
	less:Sales discount				0
	net sales					35,000
	less: cost of goods sold					24,500
	Gross profit					10,500	answer
4)	income summary				105,000
	wage expense					63,000
	rent expense					27,000
	depreciation expense					15,000