Question

The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. The merchandise inventory amounted to $57,875 on January 1, 2019, and $50,825 on December 31, 2019. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses Accounts 401 Sales 451 Sales Returns and Allowances 491 Miscellaneous Income 501 Purchases 502 Freight In 503 Purchases Returns and Allowances 504 Purchases Discounts 611 Salaries Expense-Sales 614 Store Supplies Expense 617 Depreciation Expense-Store Equipment 631 Rent Expense 634 Utilities Expense 637 Salaries Expense-Office 640 Payroll Taxes Expense 643 Depreciation Expense-Office Equipment 646 Uncollectible Accounts Expense 691 Interest Expense $243,800 Cr. 4,160 Dr. 210 Cr 101,700 Dr. 1,785 Dr. 3,410 Cr. 1,610 Cr. 43, 400 Dr. 2,120 Dr. 1,320 Dr. 11, 600 Dr. 2,810 Dr. 19,200 Dr. 4,100 Dr. 380 Dr. 530 Dr. 360 Dr.

#8

Answer 1

Ans.	BRIDGET'S OFFICE SUPPLIES
	Income Statement
	For the Year Ended December 31, 2019
	Particulars		Amount
	Operating revenue:
	Sales	$243,800
	Less: Sales returns and allowances	-$4,160
	Net sales revenue		$239,640
	Cost of goods sold		$105,515
	Gross margin		$134,125
	Less: Operating expenses:
	Selling expenses:
	Salaries expense - sales	$43,400
	Store supplies expenses	$2,120
	Depreciation expenses - Store equipment	$1,320
	Total Selling Expenses (1)		$46,840
	General and Administrative expenses:
	Rent expense	$11,600
	Utilities expense	$2,810
	Salaries expense - office	$19,200
	Payroll taxes expenses	$4,100
	Depreciation expenses - Office equipment	$380
	Uncollectible accounts expense	$530
	Total General and Administative Expenses (2)		$38,620
	Total operating expenses (1 + 2)		$85,460
	Operating income (EBIT)		$48,665
	Other income (expenses) :
	Add: Miscellaneous income		$210
	Less: Interest expenses		-$360
	Net income		$48,515
	*Calculations for net purchase:
	Net purchase = Purchases - Purchase returns and allowances - Purchase discounts
	$101,700 - $3,410 - $1,610
	$96,680
	*Calculations for Cost of goods sold:
	Cost of goods sold = Beginning inventory + Net purchase + Freight in - Ending inventory
	$57,875 + $96,680 + $1,785 - $50,825
	$105,515