Answer Happy

Exercise 5: The adjusted trial balance of Nick Company contained the following information: Debit Credit Sales Revenue 570,000 Sales Returns and Allowances Sales Discounts Freight-Out Advertising Expense Interest Expense Salaries and Wages Expense Utilities Expense Depreciation Expense Interest Revenue 27,000 Purchases Purchase Returns and Allowances 5000 Purchase Discounts 1000 Freight-In Beginning inventory of Ending inventory of 24000 Cost of Goods Sold 15,000 7,000 2,000 15,000 18,000 85,000 28,000 7,000 340,000 3000 10000 ??????
Instructions 1. Determine the cost of goods sold. 2. Use the above information to prepare a multiple-step income statement for the year ended December 31, 2014. 1- cost of goods sold = beginning inventory + purchases - ending inventory Purchases = purchases - purchase returns allowances - discounts + Freight-in Beginning Inventory. Purchases Less: Purchase returns and allowances Purchase discounts. Net purchases....... Add: Freight-in Cost of goods purchased Cost of goods available for sale. Ending Inventory. Cost of goods sold. Revenues 3 Income Statement For the Year Ended December 31, 2014 Sales revenue Less: Sales returns and allowances Sales discounts Net sales Cost of goods sold Gross profit.... Operating expenses Salaries and wages expense Utilities expense Advertising expense. Depreciation expense.. Freight-out. Income from operations. Other revenues and gains Interest revenue Other expenses and losses Interest expense.. Net income Total operating expenses.