Question

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 2019

Accounts                    Debit                Credit

Cash                       $ 99,000

Petty Cash Fund                600

Notes Receivable, due 2020      15,000    

Accounts Receivable           140,200    

Allowance for Doubtful Accounts                    $3,800

Interest Receivable             150    

Merchandise Inventory          128,500    

Warehouse Supplies           3,300    

Office Supplies               700  

Prepaid Insurance             4,640    

Land                       16,000    

Building                    107,000    

Accumulated Depreciation—Building                  16,700

Warehouse Equipment        19,800    

Accumulated Depreciation—Warehouse Equipment       9,500

Office Equipment             9,400    

Accumulated Depreciation—Office Equipment           3,900

Notes Payable, due 2020                           15,000

Accounts Payable                                 56,900

Interest Payable                                 400

Loans Payable—Long-Term                         17,000

Mortgage Payable                                 20,000

Colin O’Brien, Capital (Jan. 1)                      326,870

Colin O’Brien, Drawing          70,650    

Income Summary              131,400              128,500

Sales                                         1,110,300

Sales Returns and Allowances    8,400    

Interest Income                                   580

Purchases                   463,000    

Freight In                    9,800    

Purchases Returns and Allowances                   13,650

Purchases Discounts                               9,240

Warehouse Wages Expense    108,600    

Warehouse Supplies Expense   5,800    

Depreciation Expense—Warehouse Equipment 3,400    

Salaries Expense—Sales       151,700    

Travel Expense              24,000    

Delivery Expense             37,425    

Salaries Expense—Office       85,000    

Office Supplies Expense       1,220    

Insurance Expense          9,875    

Utilities Expense             8,000    

Telephone Expense          3,280

Payroll Taxes Expense        31,600   

Building Repairs Expense     3,700    

Property Taxes Expense      16,400    

Uncollectible Accounts Expense 3,580   

Depreciation Expense—Building 5,600    

Depreciation Expense—Office Equipment 1,620   

Interest Expense           4,000    

Totals                     $1,732,340                  $1,732,340

Required:

1. Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.
2. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.
3. Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than one year.

Analyze:

What percentage of total operating expenses is attributable to warehouse expenses?

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Answer 1