Question

Problem 3-04 The trial balance of Oriole Fashion Center contained the following accounts at November 30, the end of the company's fiscal year. Credit ORIOLE FASHION CENTER TRIAL BALANCE NOVEMBER 30, 2020 Debit Cash $33,590 Accounts Receivable 37,270 Inventory 48,570 Supplies 9,070 Equipment 140,140 Accumulated Depreciation Equipment Notes Payable Accounts Payable Common Stock Retained Earnings Sales Revenue Sales Returns and Allowances 4,200 Cost of Goods Sold 495,400 Salaries and Wages Expense 138,240 Advertising Expense 27,720 Utilities Expenses 15,760 Maintenance and Repairs Expense 12,100 Delivery Expense 16,700 Rent Expense 25,320 Totals $1,004,080 $26,640 54,570 52,070 93,570 11,570 765,660 $1,004,080

Answer 1

ORIOLE FASHION CENTER
Income Statement
For the Year Ended November 30, 2020
Sales revenue
Sales Revenue			$765,660
Less: Sales Returns and Allowances			$4,200
Net Sales			$761,460
Cost of Goods Sold			$495,400
Gross Profit        [Net Sales - Cost of Goods sold = $761,460 - $495,400]			$266,060
Operating Expenses:
Selling expenses:
Salaries and Wages Expense           [Total salaries wages expense x 70% = $138,240 x 70%]	$96,768
Advertising Expense	$27,720
Utilities Expense                             [Total utilities expense x 80% = $15,760 x 80%]	$12,608
Delivery expense	$16,700
Rent Expense                                   [Total rent expense x 80% = $25,320 x 80%]	$20,256
Depreciation expense                       [Refer 2nd point in additional adjustment data]	$16,980
Supplies expense                              [Beginning inventory of supplies - Ending inventory of supplies= $9,070 - $5,070]	$4,000
Total selling expenses		$195,032
Administrative expenses:
Salaries and Wages Expense           [Total salaries and wages expense x 30% = $138,240 x 30%]	$41,472
Maintenance and Repairs Expense	$12,100
Utilities Expense                             [Total utilities expense x 20% = $15,760 x 20%]	$3,152
Rent Expense                                   [Total rent expense x 20% = $25,320 x 20%]	$5,064
Total administrative expenses		$61,788
Total operating expenses       [$195,032 + $61,788]			$256,820
Income from operations                  [$266,060 - $256,820]			$9,240
Other expenses and Losses
Interest expense                           [Refer 3nd point in additional adjustment data]			$11,580
Net Income / (Loss)                       [$9,240 - $11,580]			($2,340)

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ORIOLE FASHION CENTER
Retained Earnings Statement
For the Year Ended November 30, 2020
Retained Earnings, December 1, 2019	$11,570
Add: Net Income / (loss)      [Refer income statement]	($2,340)
Retained Earnings, November 30, 2020   [$11,570 - $2,340]	$9,230