Purchase returns, discounts, loss, and a multistep income statement
The following information was drawn from the 2011 accounting records of Brislin Merchandisers.
1. Inventory with a list price of $30,000 was purchased under terms 2/10. net/30.
2. Brislin returned $2,500 of the inventory to the supplier.
3. The accounts payable was settled within the discount period.
4. The inventory was sold for $43,000.
5. Selling and administrative expenses amounted to $8,000.
6. Interest expense amounted to $ 1.000.
7. Land that cost $12.000 was sold for $10.000 cash.
Required
a. Determine the cost of the inventory sold.
b. Prepare a multistep income statement.
c. Where would the interest expense be shown on the statement of cash flows?
d. How would the sale of the land be shown on the statement of cash flows?
e. Explain the difference between a loss and an expense.
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