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In: Finance

Accounts payable $33,110 Merchandise inventory $34,360 Accounts receivable 13,570 Mortgage payable 106,000 Accumulated depreciation—building 61,200 Prepaid...

Accounts payable $33,110 Merchandise inventory $34,360
Accounts receivable 13,570 Mortgage payable 106,000
Accumulated depreciation—building 61,200 Prepaid insurance 4,500
Accumulated depreciation—equipment 19,880 Property tax expense 3,500
Building 175,000 Purchases 627,700
B. Hachey, capital 104,480 Purchase discounts 6,800
B. Hachey, drawings 12,700 Purchase returns and allowances 13,315
Cash 22,460 Rent revenue 3,700
Depreciation expense 14,100 Salaries expense 121,000
Equipment 57,000 Salaries payable 8,500
Freight in 5,060 Sales 875,000
Freight out 8,200 Sales discounts 8,290
Insurance expense 9,000 Sales returns and allowances 9,845
Interest expense 5,700 Unearned revenue 3,000
Land 83,000 Utilities expense 20,000
Additional information:
1. Pina Colada’s Bakery uses a periodic inventory system.
2. Of the mortgage payable, $9,200 is due on March 31, 2022.
3. A physical count determined that merchandise inventory on hand at November 30, 2021, was $37,360.
4. The owner made no capital contributions during the year.

Q Multistep income statement

Solutions

Expert Solution

Cost of goods sold = Beginning inventory +Purchase -Purchase discount -Purchase return and allowance+ Freight in -ending inventory

   = 34360+627700-6800-13315+5060-37360

= 609645

MULTI STEP INCOME STATEMENT

FOR THE YEAR ENDED NOVEMBER 30,2021
Sales 875000
less: sales discount -8290
sales return and allowance

-9845
Net sales 856865
less:cost of goods sold -609645
Gross margin 247220
less:Operating expense
Property tax expense 3500
Depreciation expense 14100
Insurance expense 9000
Freight out 8200
Salaries expense 121000
Utilities expense 20000
Total operating expense -175800
Income from operations 71420
Other revenue /(Expense)
Rent revenue 3700
Interest expense -5700 -2000
Income from continuing operations 69420

jeff jeffy answered 1 year ago
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