In: Accounting
Question 3: (CLO 4 and 5)
The adjusted trial balance of Miracle Company contained the following information:
Debit Credit
Sales $1,420,000
Interest Revenue 100,000
Sales Returns and Allowances $40,000
Sales Discounts 14,000
Cost of Goods Sold 872,000
Freight-out 4,000
Advertising Expense 30,000
Interest Expense 36,000
Store Salaries Expense 110,000
Utilities Expense 56,000
Depreciation Expense 14,000
Dividends 50,000
Instructions:
Multi step income statement
Net sales: |
||
Sales |
1,420,000 |
|
Sales returns |
- 40,000 |
|
Sales discounts | - 14,000 | |
Net sales revenue |
1,366,000 |
|
Cost of goods sold |
- 872,000 |
|
Gross profit |
494,000 |
|
Operating expenses: |
||
Freight-out |
- 4,000 |
|
Advertising Expense |
- 30,000 |
|
Store Salaries Expense |
- 110,000 |
|
Utilities Expense | - 56,000 | |
Depreciation Expense | - 14,000 | |
Total Operating expenses |
- 214,000 |
|
Operating profit |
280,000 |
|
Other revenues: |
||
Interest income |
100,000 |
|
Other expenses: |
||
Interest expense |
- 36,000 |
|
Net income |
$344,000 |
Journal
December 31, 2019. | Sales revenue | 1,420,000 | |
Interest revenue | 100,000 | ||
Income summary | 1,520,000 | ||
December 31, 2019. | Income summary | 1,176,000 | |
Sales Returns and Allowances | 40,000 | ||
Sales Discounts | 14,000 | ||
Cost of Goods Sold | 872,000 | ||
Freight-out | 4,000 | ||
Advertising Expense | 30,000 | ||
Interest Expense | 36,000 | ||
Store Salaries Expense | 110,000 | ||
Utilities Expense | 56,000 | ||
Depreciation Expense | 14,000 | ||
December 31, 2019. | Income summary | 344,000 | |
Retained earnings | 344,000 | ||
December 31, 2019. | Retained earnings | 50,000 | |
Dividends | 50,000 |