Question

In: Accounting

1.On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings...

1.On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows:

Accumulated Depreciation—Building $747,950 Merchandise Inventory $939,850
Administrative Expenses 545,700 Notes Payable 240,200
Building 2,416,650 Office Supplies 20,650
Cash 180,250 Salaries Payable 7,700
Cost of Merchandise Sold 3,965,850 Sales 6,126,850
Interest Expense 9,550 Selling Expenses 717,650
Kathy Melman, Capital 1,545,600 Store Supplies 87,000
Kathy Melman, Drawing 181,750

a. Prepare a multiple-step income statement for the year ended March 31, 2019.

Racine Furnishings Company
Income Statement
For the Year Ended March 31, 2019
Sales $
Cost of merchandise sold
Gross profit $
Expenses:
Selling expenses $
Administrative expenses
Total expenses
Income from operations $
Other expense:
Interest expense
Net income $

2.Cost of Merchandise Sold

Based on the following data, determine the cost of merchandise sold for November:

Increase in estimated returns inventory $8,200
Merchandise inventory, November 1 13,700
Merchandise inventory, November 30 26,300
Purchases 273,900
Purchases returns and allowances 9,300
Purchases discounts 5,500
Freight in 3,800

3.Cost of Merchandise Sold

Based on the following data, determine the cost of merchandise sold for July:

Increase in estimated returns inventory $27,200
Merchandise inventory, July 1 45,300
Merchandise inventory, July 31 87,000
Purchases 906,700
Purchases returns and allowances 30,800
Purchases discounts 18,100
Freight in 12,700

4.

Determining Amounts to be Paid on Invoices

Determine the amount to be paid in full settlement of each of the following invoices, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period:

Merchandise Freight Paid by Seller Customer Returns
and Allowances
a. $17,000 - FOB destination, n/30 $900
b. 10,200 $400 FOB shipping point, 1/10, n/30 1,200
c. 5,500 - FOB shipping point, 1/10, n/30 500
d. 4,400 200 FOB shipping point, 2/10, n/30 600
e. 1,300 - FOB destination, 1/10, n/30

Solutions

Expert Solution

Question 1:-

The multiple step income statement for Racine Furnishings company for the year ended March 31, 2019 is as follows:-

Racine Furnishings Company
Multiple Step Income Statement
Amount Amount
Revenues
Sales    6,126,850
Less:- Cost of Merchandise sold (3,965,850)
Gross Profit      2,161,000
Less - Expenses
Selling expenses    (717,650)
Administrative expenses    (545,700)
Total expenses    (1,263,350)
Income From Operations        897,650
Other Expense:- Interest expense           (9,550)
Net Income        888,100

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ekkarill92 answered 1 year ago
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