Question

Fill in the blanks in the following separate income statements a through e (Amounts to be deducted should be indicated by a minus sign.) b 43,500 e 25,600 $ 62,000 $ $ 46,000 $ 17,050 7,500 8,000 38,000 Sales Cost of goods sold Merchandise inventory (beginning) Total cost of merchandise purchases Merchandise inventory (ending) Cost of goods sold Gross profit Expenses Net income (loss) 8,000 32,000 (6,600) | 4,560 6,600 (9.000) (3.000) 16,000 34,050 7,000 10,000 3.750 12,150 (8.400) 10,650 16,850 45 600 3,600 42,000 6.000 $ $ $

Answer 1

b 43,500 62,000 46,000 79,000 25,600 Income Statement : Particulars Sales (A) Cost of goods sold :- Merchandise inventory (beginning) (B) Total cost of merchandise purchases (C) Merchandise inventory (ending) (D) Cost of goods sold (B+C-D)=E Gross Profit (A-E) =F 17,050 7,500 4,560 6,600 8,000 38,000 (11,950) 34,050 27,950 10,000 17,950 1,950 (3,000) 16,000 8,000 32,000 (6,600) 33,400 (3,460) 7,700 43,750 (9,000) 42,250 3,750 12,150 (8,400) 27,500 10,650 45,600 3,600 17,900 6,000 Expenses (G) Net Income/(Loss) (F-G) 16,850 42,000 11,900 Adjusting entry to be made for expiry of three months = (925 per month * 3 months (October to December)) Adjusting entry to be made for expiry of three months = (9253) Adjusting entry to be made for expiry of three months = $ 2,775/. Adjusting entry will be made for Debit of Unearned revenue of $ 2,775 and Credit of earned revenue $ 2,775/. Answer is A debit to Unearned rent and credit to Rent revenue for $ 2,775/.