Question

The following is an alphabetical list of Grouper’s Bakery’s adjusted account balances at the end of the company’s fiscal year on November 30, 2021: Accounts payable $32,410 Merchandise inventory $34,360 Accounts receivable 13,470 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 624,700 B. Hachey, capital 104,480 Purchase discounts 6,900 B. Hachey, drawings 12,700 Purchase returns and allowances 13,315 Cash 27,830 Rent revenue 3,300 Depreciation expense 14,800 Salaries expense 121,900 Equipment 57,000 Salaries payable 8,500 Freight in 5,160 Sales 875,000 Freight out 8,200 Sales discounts 8,320 Insurance expense 9,000 Sales returns and allowances 9,845 Interest expense 5,400 Unearned revenue 3,000 Land 78,000 Utilities expense 20,300 Additional information: 1. Grouper’s Bakery uses a periodic inventory system. 2. Of the mortgage payable, $8,800 is due on March 31, 2022. 3. A physical count determined that merchandise inventory on hand at November 30, 2021, was $37,370. 4. The owner made no capital contributions during the year.

(a1) Prepare a multiple-step income statement for the November 30, 2021, year end. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Answer 1

GROUPER LIMITED
Multi step Income Statement
For the year ended November 30, 2021
Revenues
Sales		$ 875,000
Less: Sales returns and allowances	$    (9,845)
Less: Sales discounts	$    (8,320)
		$ (18,165)
Net sales		$ 856,835
Less: Cost of goods sold
Merchandise inventory, Dec 1, 2020	$    34,360
Add: Purchases	$ 624,700
Less: Purchase discounts	$    (6,900)
Less: purchase returns and allowances	$ (13,315)
Add: freight in	$      5,160
Less: Merchandise inventory, Nov 30, 2021	$    37,370
Cost of goods sold		$ 681,375
Gross profit		$ 175,460
Less: Operating expenses
Depreciation expense	$    14,800
Freight out	$      8,200
Insurance expense	$      9,000
Property tax expense	$      3,500
Salaries expense	$ 121,900
Utilities expense	$    20,300
Total operating expense		$ 177,700
Operating income (loss)		$    (2,240)
Other income and (expenses)
Interest expense		$    (5,400)
Net loss		$    (7,640)

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