College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 25, Problem 1SEA

GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST ATE MENT Bill Walters and Alice Jennings are partners in a business called Walters and Jennings Sportswear that sells athletic footwear. They have organized the business on a departmental basis as follows: running shoes, walking shoes, and specialty shoes. At the end of the first year of operation, the sales and cost of goods sold for the three departments are as follows:

Chapter 25, Problem 1SEA, GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST ATE MENT Bill Walters and Alice Jennings are

Prepare the gross profit section of a departmental income statement for the year ended December 31, 20--. Show the gross profit for each department and for the business in total.

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Accordingly, 15% of rent, depreciation, and utility expenses pertain to the sales office while the rest pertains to the corporate office. Questions: How much is the net sales for the year? How much is the cost of sales for the year?  How much is the gross profit for the year? How much is the net income for the year?  Prepare a statement of comprehensive income. Prepare a financial statement.
For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 for advertising. At the end of the year, Willie Green, the president, is presented with the following condensed comparative income statement: Tri-Comic Company Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income from operations Other revenue Income before income tax Income tax expense Net income Required: 2012 $1,500,000 510,000 $990,000 $270,000 180,000 $450,000 $540,000 60,000 $600,000 450,000 $150,000 20Y1 $1,250,000 475,000 $775,000 $200,000 156,250 $356,250 $418,750 50,000 $468,750 375,000 $93,750 Required: Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Round to one decimal place. Enter all amounts as positive numbers.
The Officers of the Company reviewed the profitability of the company's four products and the potential effect of several proposals for varying the product mix. An excerpt from the year's income statement and other date follows:                 Total P Q R S Sales P62,600 P10,000 P18,000 P12,600 P22,000 Cost of Goods Sold 44,274 4,750 7,056 13,968 18,500 Gross Profit P18,326 P5,250 P10,944 P(1,368) P3,500 Operating Expense 12,012 1,990 2,976 2,826 4,220 Profit before    income tax P6,314 P3,260 P7,968 P(4,194) P(720) Units Sold   1,000 1,200 1,800 2,000 Sales Price Per Unit   P10.00 P15.00 P7.00 P11.00 Variable Cost of goods        sold per unit   P2.50 P3.00 P6.50 P6.00 Variable operating      expense per unit   P1.17 P1.25 P1.00 P1.20   The total fixed cost is not expected to fluctuate as a result of changes under consideration. Required:…

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College Accounting, Chapters 1-27

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