Select Page
Brief Exercise 5-1
Presented here are the components in Casilla Company s income statement.
Determine the missing amounts.

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 \$

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.
Cost of goods sold \$

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%.)
Profit margin %

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)

Prepare an income statement using the multi-step format. Assume a 25% tax rate.

(b)

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

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 . (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.) (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.) (c) Prepare a trial balance on April 30, 2014. (d) Prepare an income statement through gross profit, assuming inventory on hand at April 30 is \$4,263.