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Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income
| Brief Exercise 5-8 |
| Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases $404,000; Purchase Returns and |
| Allowances $13,000; Purchase Discounts $9,000; and Freight-in $16,000. |
| Determine net purchases and cost of goods purchased. |
| Net purchases $ |
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Cost of goods purchased $
| Brief Exercise 5-9 |
| Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases $404,000; Purchase Returns and |
| Allowances $13,000; Purchase Discounts $9,000; and Freight-in $16,000. Tracy Company has beginning inventory of $60,000, ending |
| inventory of $90,000, and net sales of $612,000. |
| Determine the amounts to be reported for cost of goods sold and gross profit. |
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| Cost of goods sold $ |
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Gross profit $
| Brief Exercise 5-10 |
| Durbin Corporation reported net sales of $250,000, cost of goods sold of $150,000, operating expenses of $50,000, net income of $32,500, |
| beginning total assets of $520,000, and ending total assets of $600,000. |
| Calculate profit margin and gross profit rate. (Round answers to 0 decimal places, e.g. 10%.) |
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| Profit margin % |
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Gross profit rate %
| Exercise 5-6 (Part Level Submission) |
| Presented below is information for Zhou Co. for the month of January 2014. |
| Cost of goods sold $212,000 Rent expense $32,000 |
| Freight-out 7,000 Sales discounts 8,000 |
| Insurance expense 12,000 Sales returns and allowances 20,000 |
| Salaries and wages expense 60,000 Sales revenue 370,000 |
| (a) |
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Prepare an income statement using the multi-step format. Assume a 25% tax rate.
| (b) |
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Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%.)
| Problem 5-2A |
| McCoy Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the |
| month of June, the following merchandising transactions occurred. |
| June 1 Purchased books on account for $1,040 (including freight) from Carlin Publishers, terms 2/10, n/30. |
| 3 Sold books on account to the Goldschmidt bookstore for $1,200. The cost of the merchandise sold was $720. |
| 6 Received $40 credit for books returned to Carlin Publishers. |
| 9 Paid Carlin Publishers in full. |
| 15 Received payment in full from the Goldschmidt bookstore. |
| 17 Sold books on account to Town Crier for $1,200. The cost of the merchandise sold was $730. |
| 20 Purchased books on account for $720 from Good Book Publishers, terms 1/15, n/30. |
| 24 Received payment in full from Town Crier. |
| 26 Paid Good Book Publishers in full. |
| 28 Sold books on account to Emporia Bookstore for $1,300. The cost of the merchandise sold was $780. |
| 30 Granted Emporia Bookstore $130 credit for books returned costing $80. |
| Journalize the transactions for the month of June for McCoy Warehouse, using a perpetual inventory system. (Credit account titles are |
| automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the |
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problem. Round answers to 0 decimal places e.g. 15,222.)
| Problem 5-9A (Part Level Submission) |
| At the beginning of the current season on April 1, the ledger of Flint Hills Pro Shop showed Cash $ 2,500 ; Inventory $ 3,500 ; and Common |
| Stock $ 6,000 . The following transactions occurred during April 2014. |
| Apr. 5 Purchased golf bags, clubs, and balls on account from Akers Co. $ 1,500 , terms 3 /10, n/60. |
| 7 Paid freight on Akers Co. purchases $ 80 . |
| 9 Received credit from Akers Co. for merchandise returned $ 200 . |
| 10 Sold merchandise on account to members $ 1,340 , terms n/30. |
| 12 Purchased golf shoes, sweaters, and other accessories on account from Palmer Sportswear $ 830 , terms 1 /10, n/30. |
| 14 Paid Akers Co. in full. |
| 17 Received credit from Palmer Sportswear for merchandise returned $ 30 . |
| 20 Made sales on account to members $ 810 , terms n/30. |
| 21 Paid Palmer Sportswear in full. |
| 27 Granted credit to members for clothing that did not fit properly $ 80 . |
| 30 Received payments on account from members $ 1,220 . |
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| (a) |
| Journalize the April transactions using a periodic inventory system. (Credit account titles are automatically indented when amount is |
| entered. Do not indent manually. Record journal entries in the order presented in the problem.) |
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| (b) |
| Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions. (Post entries in the order of journal |
| entries posted in part a.) |
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| (c) |
| Prepare a trial balance on April 30, 2014. |
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| (d) |
| Prepare an income statement through gross profit, assuming inventory on hand at April 30 is $4,263. |
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