Albin Company’s adjusted trial balance on March 31, 2011, its fiscal year-end, follows.
| Debit | Credit |
Merchandise inventory | $ 46,500 |
|
Other (noninventory) assets | 190,600 |
|
Total liabilities |
| $ 52,500 |
Common stock |
| 12,000 |
Retained earnings |
| 140,475 |
Dividends | 2,000 |
|
Sales |
| 318,000 |
Sales discounts | 4,875 |
|
Sales returns and allowances | 21,000 |
|
Cost of goods sold | 123,900 |
|
Sales salaries expense | 43,500 |
|
Rent expense—Selling space | 15,000 |
|
Store supplies expense | 3,750 |
|
Advertising expense | 27,000 |
|
Office salaries expense | 39,750 |
|
Rent expense—Office space | 3,900 |
|
Office supplies expense | 1,200 |
|
Totals | $522,975 | $522,975 |
On March 31, 2010, merchandise inventory was $37,500. Supplementary records of merchandising activities for the year ended March 31, 2011, reveal the following itemized costs.
Invoice cost of merchandise purchases | $136,500 |
Purchase discounts received | 2,850 |
Purchase returns and allowances | 6,600 |
Costs of transportation-in | 5,850 |
Required
1.Calculate the company’s net sales for the year.
2.Calculate the company’s total cost of merchandise purchased for the year.
3.Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.
4.Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.
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