Question

1. The following transactions are for Pharoah Company.

1.		On December 3, Pharoah Company sold $560,000 of merchandise to Sheridan Co. on account. The cost of the merchandise sold was $369,600.
2.		On December 8, Sheridan Co. returned $28,000 of merchandise purchased on December 3. The cost of the goods was $17,920.
3.		On December 13, Pharoah Company received the balance due from Sheridan Co.

Prepare a tabular summary to record these transactions for Pharoah Company using a perpetual inventory system. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

				Assets					=	Liabilities	+	Stockholders' Equity
														Retained Earnings
Date				Cash	+	Accts. Rec.	+	Inventory	=	Accts. Pay.	+	Common Stock	+	Rev.	-	Exp.
Dec.		3		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		select an account title                                                          Cost of goods soldBad debt expenseSales revenueSales returns & allowancesAccounts recievable
				enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		select an account title                                                          Sales returns & allowancesBad debt expenseCost of goods soldSales revenueAccounts recievable
		8		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		select an account title                                                          Bad debt expenseCost of goods soldAccounts recievableSales revenueSales returns & allowances
				enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		select an account title                                                          Cost of goods soldSales revenueBad debt expenseSales returns & allowancesAccounts recievable
		13		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount		select an account title                                                          Cost of goods soldSales returns & allowancesSales revenueBad debt expenseAccounts recievable

2. Suppose in its income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions).

Salaries and wages expenses		$ 449		Research and development expense		$ 109
Depreciation expense		90		Income tax expense		275
Sales revenue		5,619		Loss on disposal of plant assets		46
Interest expense		156		Cost of goods sold		3,060
Advertising expense		489		Rent expense		102
Sales returns and allowances		266		Utilities expense		57

(a) Prepare a multiple-step income statement.

Answer 1

1)
				Accts				Accts.		Common
	Date	Cash	+	Recv.	+	Inventory	=	Pay.	+	Stock	+	Revenue	-	Expenses	=	Net Income
	03-Dec			$ 5,60,000.00								$ 5,60,000.00				$ 5,60,000.00
						$ -3,69,600.00								$ 3,69,600.00		$ -3,69,600.00
	08-Dec			$    -28,000.00								$ -28,000.00				$    -28,000.00
						$      17,920.00								$ -17,920.00		$      17,920.00
	13-Dec	$ 5,32,000.00		$ -5,32,000.00

2)	Income Statement
	Particulars				Amount	Amount
	Sales Revenue				$ 5,619.00
Less:	Sales returns and allowances				$    266.00
	Net Sales					$ 5,353.00
Less:	Cost of Goods sold					$ 3,060.00
	Gross Margin					$ 2,293.00
Less:	Operating Expenses
	Salaries and Wages Expenses				$    449.00
	Depreciation Expenses				$      90.00
	Advertising Expenses				$    489.00
	Rent Expense				$    102.00
	Utilities Expense				$      57.00
	Research and development Expense				$    109.00
	Total Operating expenses					$ 1,296.00
	Operating Income					$    997.00
Less:	Non- Operating Expenses
	Interest Expense				$    156.00
	Loss on disposal of plant assets				$      46.00
	Total Non- Operating Expenses					$    202.00
	Income before tax					$    795.00
Less:	Income tax expense					$    275.00
	Net Income					$    520.00

Are these okay?