Answer Happy

3 Using the below balances from an adjusted trial balance, prepare the multi-step income statement in proper form. INCOME STATEMENT Multi-step Version ACCOUNT Balance Gross sales $ 44,207 Sales allowance and returns $ 1,632 Sales discount $ 1,077 Cost of sales $ 18,337 * Telephone/internet expenses $ 185 Transit insurance for sales deliveries $ 134 * Depreciation of buildings $ 4,125 Advertising expenses $ 235 Sales commission $ 740 Warehous rent expenses $ 1,800 Office Rent expenses $ 1,500 ** Heat and light expenses $ 882 * Wages/salaries expenses $ 7,529 ** Vehicle maintenance expenses $ 721 Freight out $ 154 Warehouse security expense $ 360 ** Inventory shrinkage $ 144 ** Cleaning expenses $ 1,500 Flood disaster fund contribution to C $ 4,500 Dividend received from investments $ 10,000 ** Supplies expenses $ 856 The highlighted cost are joint, and should be apportioned as follows. Selling Administration * Distribution 50% 50% 70% 30% **
SOLUTION - Cost of sales 1 Calculate Cost of Sales - Periodic Inventory System From the below accounts balances, prepare the cost of sales. Transportation in $ 853 Purchase allowance/returns $ 4,653 Sales commission $ 3,114 Purchases $ 81,269 Transportation out $ 3,894 Purchases discount $ 4,117 Ending inventory $ 10,723 Goods in transit, with company shippers* $ 1,855 Beginning inventory $ 10,116 Transit insurance for purchases, FOB shipping poin $ 877 * not included in ending inventory figure above.