Item a: The adjusted trial balance of Entity B included the following selected accounts: Debit Credit...

Item a: The adjusted trial balance of Entity B included the following selected accounts:

Debit Credit

Sales Revenue $645,000

Sales Returns and Allowances $ 50,000

Sales Discounts 9,500

Cost of Goods Sold 396,000

Freight-Out 2,000

Advertising Expense 15,000

Interest Expense 19,000

Salaries and Wages Expense 84,000

Utilities Expense 23,000

Depreciation Expense. 3,500

Interest Revenue b 25,000

Instructions

1. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2022.

2. Calculate the profit margin and gross profit rate.

3. Suggest three ways that either the gross profit rate or profit margin might be increased.

Item b: Entity C sold Entity D $10,000 of merchandise, terms 3/10, net 30. Entity C paid $5,000 for the merchandise.

Instructions

1. Journalize the sale on Entity C's books.

2. If Entity D returned 2500 of the merchandise, and paid for the remainder 11 days from the date of the sales invoice, how much did Entity D remit (pay) Entity C?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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