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

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 3 years ago

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