Question

Instructions On December 31, 2045, the balances of the accounts appearing in the ledger of Wyman Company are as follows: Cash Accounts receivable Inventory, January 1, 2045 Estimated returns inventory, January 1, 2045 Office supplies Prepaid insurance Land Store equipment Accumulated depreciation-store equipment Office equipment Accumulated depreciation-office equipment Accounts payable Salaries payable Customer refunds payable Unearned rent Notes payable Common stock Retained earnings Dividends Sales $13,500 72,000 257,000 35,000 3,000 4,500 150,000 270,000 55.900 78,500 16,000 77,800 3,000 50.000 8,300 50,000 150,000 365,600 25,000 3,280,000 2,650,000 93,000 37,000 48,000 300,000 45,000 9,000 6,000 12,000 175,000 28,000 3,000 2,000 1,500 3,500 7.000 2,000 Purchases Purchases returns and allowances Purchases discounts Freight in Sales salaries expense Advertising expense Delivery expense Depreciation expense-store equipment Miscellaneous selling expense Office salaries expense Rent expense Insurance expense Office supplies expense Depreciation expense-office equipment Miscellaneous administrative expense Rent revenue Interest expense

Answer 1

38 la Periodic Inventory System 39 Purchases 40 lb 41 42 3,280,000 257,000 WYMAN COMPANY Income Statement For the year Ending Dec.31,2045 Revenue from Sales; Sales Cost of goods Sold; Inventory , January 1, 2045 Cost of Merchandise Purchased Purchases 2,650,000 Less;Purchase Returns and allowances (93,000) Purchase Discounts (37,000) Net Purchases 2,520,000 Add Freight In 48,000 Total Cost of Merchandise Purchased Inventory available for Sale Less;Inventory, December 31,2045 Cost of Goods sold before estimated returns Increase in estimated returns Inventory Cost of Goods sold Gross Profit 2,568,000 2,825,000 (305,000) 2,520,000 (5,000) 59 61 2,515,000 765,000

(300,000) (45,000) (9,000) (6,000) (12,000) (372,000) Operating Expenses; Selling expenses; Sales Salaries expense Advertising expense Delivery expense Depreciation expense -Store Equipment Miscellaneous Selling expense Total Selling expenses Adminstrative expenses; Office Salaries expense Rent expense Insurance expense Office Supplies expense Depreciation expense - Office Equipment Miscellaneous adminstrative expense Total adminstrative expenses Total Operating expenses Income from Operations Other revenue and expense; Rent Revenue Less Interest expense Net Income (175,000) (28,000) (3,000) (2,000) (1,500) (3,500) (213,000) (585,000) 180,000 7,000 (2,000) 5,000 185,000

Closing Inventory 87 Post Ref. Credit Date Description 31-Dec Merchandise Inventory Sales Purchase Returns and allowances Purchase Discounts Increase in estimated returns Inventory Rent Revenue Income Summary Debit 305,000 3,280,000 93,000 37,000 5,000 7,000 3,727,000

3,542,000 99 100 101 102 103 Income Summary Merchandise Inventory Purchases Freight In Sales Salaries expense Advertising expense Delivery expense Depreciation expense-Store Equipment Miscellaneous Selling expense Office Salaries expense Rent expense Insurance expense Office Supplies expense Depreciation expense-Office Equipment Miscellaneous adminstrative expense Interest expense 104 257,000 2,650,000 48,000 300,000 45,000 9,000 6,000 12,000 175,000 28,000 3,000 2,000 1,500 3,500 2,000 105 106 107 108 109 110 111 112 185,000 113 114 Income Summary Retained Earnings 185,000 115 25,000 Retained Earnings Dividends 25,000 116 117 118 119 4) 120 $185,000, The same net income as under the periodic inventory system.