Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 3, Problem 14E
Comparing gross margin and gain on sale of land
Lopez Sales Company had the following balances in its accounts on January 1, 2018:
Lopez experienced the following events during 2018:
1. Sold merchandise inventory that cost $22,000 for $40,500.
2. Sold land that cost $30,000 for $46,000.
Required
a. Determine the amount of gross margin recognized by Lopez.
b. Determine the amount of the gain on the sale of land recognized by Lopez.
c. Comment on how the gross margin versus the gain will be recognized on the income statement.
d. Comment on how the gross margin versus the gain will be recognized on the statement of
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Crane Ltd. reported the following for the fiscal year 2021:
Sales
Cost of goods sold
Gross profit
Operating expenses
Depreciation expense
Gain on sale of land
Profit before income tax
Income tax expense
Profit
Additional information:
1.
2.
CRANE LTD.
Income Statement
Year Ended September 30, 2021
3.
4.
5.
6.
$ 109,000
34,000
(44,000)
$583,000
338,000
245,000
99,000
146,000
36,500
$109,500
Accounts receivable decreased by $16,300 during the year.
Inventory increased by $7,800 during the year.
Prepaid expenses decreased by $5,800 during the year.
Accounts payable to suppliers increased by $11,300 during the year.
Accrued expenses payable increased by $5,300 during the year.
Income tax payable decreased by $7,100 during the year.
Use the following excerpts from Victrolia Company’s financial information.
2018 Income Statment
Balance Sheets
Sales
$475,000
Cost of Goods Sold
(221,500)
Operating Expenses, other thanDepreciation Expense
(60,600)
Depreciation Expense
(21,000)
Gain on Sale of Plant Assets
23,500
Net Income
$195,400
Dec. 31,2018
Cash
$347,450
Accounts Receivable
39,750
Inventory
33,000
Accounts Payable
17,550
Accured Liabilities
3,500
Dec. 31, 2017
Cash
$133,500
Accounts Receivable
36,500
Inventory
35,000
Accounts Payable
19,550
Accured Liabilities
2,200
Additional Information:
Plant assets were sold for $45,000; book value $16,500
Dividends of $22,000 were declared and paid
Cash Flow from Financing Activities:
$Dividends Paid
I just need the answer on dividends answer box?
Use the following excerpts from Victrolia Company’s financial information.
2018 Income Statment
Balance Sheets
Sales
$475,000
Cost of Goods Sold
(221,500)
Operating Expenses, other thanDepreciation Expense
(60,600)
Depreciation Expense
(21,000)
Gain on Sale of Plant Assets
23,500
Net Income
$195,400
Dec. 31,2018
Cash
$347,450
Accounts Receivable
39,750
Inventory
33,000
Accounts Payable
17,550
Accured Liabilities
3,500
Dec. 31, 2017
Cash
$133,500
Accounts Receivable
36,500
Inventory
35,000
Accounts Payable
19,550
Accured Liabilities
2,200
Additional Information:
Plant assets were sold for $45,000; book value $16,500
Dividends of $22,000 were declared and paid
Prepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments.
Victrolia CompanyStatement of…
Chapter 3 Solutions
Survey Of Accounting
Ch. 3 - 1. Define merchandise inventory. What types of...Ch. 3 - 2. What is the difference between a product cost...Ch. 3 - 3. How is the cost of goods available for sale...Ch. 3 - 4. What portion of cost of goods available for...Ch. 3 - 5. When are period costs expensed? When are...Ch. 3 - 6. If PetCo had net sales of 600,000, goods...Ch. 3 - Prob. 7QCh. 3 - 8. What are the effects of the following types of...Ch. 3 - 9. Northern Merchandising Company sold inventory...Ch. 3 - 10. If goods are shipped FOB shipping point, which...
Ch. 3 - 11. Define transportation-in. Is it a product or a...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - 14. Dyer Department Store purchased goods with the...Ch. 3 - 15. Eastern Discount Stores incurred a 5,000 cash...Ch. 3 - 16. What is the purpose of giving credit terms to...Ch. 3 - Prob. 17QCh. 3 - 18. Ball Co. purchased inventory with a list price...Ch. 3 - 22. Explain the difference between purchase...Ch. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - 25. What is the advantage of using common size...Ch. 3 - 27. What is the purpose of preparing a schedule of...Ch. 3 - 28. Explain how the periodic inventory system...Ch. 3 - Prob. 25QCh. 3 - Exercise 3-1 Determining the cost of financing...Ch. 3 - Exercise 3-2 Comparing a merchandising company...Ch. 3 - Exercise 3-3 Effect of inventory transactions on...Ch. 3 - Exercise 3-4 Effect of inventory transactions on...Ch. 3 - Exercise 3-5 Recording inventory transactions in a...Ch. 3 - Exercise 4-6A Understanding the freight terms FOB...Ch. 3 - Exercise 3-7 Effect of purchase returns and...Ch. 3 - Exercise 3-8 Accounting for product costs:...Ch. 3 - Effect of product cost and period cost: Horizontal...Ch. 3 - Cash Discounts and Purchase Returns On April 6,...Ch. 3 - Exercise 4-9A Determining the effect of inventory...Ch. 3 - Inventory financing costs Bill Norman comes to you...Ch. 3 - Effect of shrinkage: Perpetual system Ho Designs...Ch. 3 - Comparing gross margin and gain on sale of land...Ch. 3 - Single-step and multistep income statements The...Ch. 3 - Prob. 16ECh. 3 - Effect of cash discounts on financial statements:...Ch. 3 - Using common size statements and ratios to make...Ch. 3 - Prob. 19ECh. 3 - Determining cost of goods sold: Periodic system...Ch. 3 - Identifying product and period costs Required...Ch. 3 - Problem 4-23A Identifying freight costs Required...Ch. 3 - Effect of purchase returns and allowances and...Ch. 3 - Preparing a schedule of cost of goods sold and...Ch. 3 - Prob. 25PCh. 3 - Comprehensive cycle problem: Perpetual system At...Ch. 3 - Prob. 27PCh. 3 - Comprehensive cycle problem: Periodic system...Ch. 3 - Prob. 1ATCCh. 3 - ATC 3-2 Group Exercise Multistep income statement...Ch. 3 - Prob. 3ATCCh. 3 - Prob. 4ATC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Determining gross profit During the current year, merchandise is sold for $ 11, 750,000. The cost ofthe Roods sold is $7,050,000. . A. What is the amount of the gross profit?. B. Compute the gross profit percentage (gross profit divided bysales).. C. Will the income statement always report a net income? Explain.arrow_forwardUse the following excerpts from Victrolia Company’s financial information. 2018 Income Statment Balance Sheets Sales $455,000 Cost of Goods Sold (221,500) Operating Expenses, other thanDepreciation Expense (58,600) Depreciation Expense (20,000) Gain on Sale of Plant Assets 23,500 Net Income $178,400 Dec. 31,2018 Cash $329,450 Accounts Receivable 39,750 Inventory 31,000 Accounts Payable 17,550 Accured Liabilities 3,500 Dec. 31, 2017 Cash $133,500 Accounts Receivable 36,500 Inventory 35,000 Accounts Payable 19,550 Accured Liabilities 2,200 Additional Information: Plant assets were sold for $45,000; book value $16,500 Dividends of $24,000 were declared and paid Prepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments. Victrolia CompanyStatement of…arrow_forwardDetermining gross profitDuring the current year, merchandise is sold for $31,850,000. The cost ofthe merchandise sold is $24,206,000. a. What is the amount of the gross profit?b. Compute the gross profit percentage (gross profit divided by sales).c. Will the income statement necessarily report o net income? Explain.arrow_forward
- Use the following excerpts from Victrolia Company’s financial information. 2018 Income Statment Balance Sheets Sales $455,000 Cost of Goods Sold (221,500) Operating Expenses, other thanDepreciation Expense (58,600) Depreciation Expense (20,000) Gain on Sale of Plant Assets 23,500 Net Income $178,400 Dec. 31,2018 Cash $329,450 Accounts Receivable 39,750 Inventory 31,000 Accounts Payable 17,550 Accured Liabilities 3,500 Dec. 31, 2017 Cash $133,500 Accounts Receivable 36,500 Inventory 35,000 Accounts Payable 19,550 Accured Liabilities 2,200 Additional Information: Plant assets were sold for $45,000; book value $16,500 Dividends of $24,000 were declared and paid Prepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments. Victrolia CompanyStatement of…arrow_forwardHomework i os Me LOGIC COMPANY Comparative Income Statement For Years Ended December 31, 2022 and 2023 Gross sales Sales returns and allowances Net sales Cost of merchandise (goods) sold Gross profit Operating expenses: Depreciation Selling and administrative Research Miscellaneous Total operating expenses Income before interest and taxes Interest expense Income before taxes Provision for taxes Net income Current assets: Cash Plant and equipment: Building (net) Land Accounts receivable Merchandise inventory. Prepaid expenses Total current assets Total assets Total plant and equipment Assets Current liabilities: Accounts payable Salaries payable Total current liabilities Common stock Retained earnings Liabilities Long-term liabilities: Mortgage note payable Total liabilities. LOGIC COMPANY Comparative Balance Sheet December 31, 2022 and 2023 Stockholders' Equity Asset turnover ratio, Total stockholders' equity Total liabilities and stockholders' equity 2023 $ 19,600 1,000 2023 $ 18,600…arrow_forwardPrepare an income statement for Hansen Realty for the year ended December 31, 2023. Beginning inventory was $1,242. Ending inventory was $1,594. Note: Input all amounts as positive values. Sales Sales returns and allowances Sales discount Purchases Purchase discounts Depreciation expense Salary expense Insurance expense Utilities expense Plumbing expense Rent expense HANSEN REALTY Income Statement For Year Ended December 31, 2023 Gross profit from sales Operating expenses: $ 34,300 1,086 1,146 10,212 Total operating expenses 534 109 4,900 2,300 204 244 174arrow_forward
- [Question 1] Saturn Company Comparative Balance Sheet 2018 2017 Assets Cash Accounts Recelvable Prepaid Insurance Inventory Land Plant Assets $ 47,500 21,500 2,500 48,000 20,000 230,000 (85,500) $284,000 $ 24,300 26,000 1,800 45,500 10,000 190,000 (71,100) Accumulated Depreciation Total AssetsS $226,500 Llabilities and Equity Labilities Accounts Payable Salaries Payable Notes Payable Total Llabilities S 19,000 1,500 75.000 $ 17,200 85.000 104.100 95.500 315.000 64.900 Common Stock Retained Earnings Tota Equity Total Liabilities and Equity 61,000 379.900 131.000 $284.000 $226,500arrow_forwardA company reported the following data for the year ending 2018: Description Amount Sales Sales discount Sales returns and allowances $400,000 $16,000 $13,000 $117,000 $153,000 |Cost of goods sold |Operating expense Income tax expense $23,750 Compute the amount of gross profit to be reported on the income statement. a. $101,000 b. $117,000 c. $254,000 d. $124,750 Answer O O O Oarrow_forwardAt the fiscal year ended June 30, 2020, the following information is available for Shein Company: Cost of goods sold. . .$167,400 Sales returns and allowances... 4,000 Sales revenue. 243,200 Interest expense... 5,000 Operating expenses... 88,700 Shein's net income/(net loss) for the period is Select one: a. Net income of $21,900 O b. Net income of $11,900 O c. Net loss of $11,900 O d. Net loss of $21,900arrow_forward
- Use the following excerpts from Yardley Company’s financial information. 2018 IncomeStatement BalanceSheets Sales $455,000 Cost of Goods Sold (221,500) Operating Expenses, other than Depreciation Expense (60,600) Depreciation Expense (21,000) Gain on Sale of Plant Assets 23,500 Net Income $175,400 Dec. 31,2018 Cash $323,450 Accounts Receivable 39,750 Inventory 31,000 Accounts Payable 17,550 Accured Liabilities 3,500 Dec. 31, 2017 Cash $133,500 Accounts Receivable 36,500 Inventory 35,000 Accounts Payable 19,550 Accured Liabilities 2,200 Additional Information: Plant assets were sold for $40,000; book value $16,500. Dividends of $23,000 were declared and paid. Prepare a statement of cash flows (indirect method) for the year 2018. Use the minus sign to indicate cash outflows, a…arrow_forwardUse this information to Prepare a multiple-step income statement with earnings per sharedisclosure Denver Co. 12/31/2022 Debits CreditsPartial Trial Balance DataSales revenue 700,000Interest revenue 60,000Salary payable 15,000Gain on sale of land 110,000Patent 15,000Supply inventory 25,000Cost of goods sold 500,000Salary expenses 150,000Common stock 250,000Retained earnings 150,000Cash 250,000Office expense 100,000Denver's business segment, Division A, was sold at a pretax loss of 25,000 on July 1, 2022. Ithad earned a $13,000 pretax operating income from January 1, 2022 to the disposal date. Denverhad 50,000 shares of stock outstanding throughout the year. Income tax expense has not yet beenaccrued. The effective tax rate is 30%. dont give me handwritten answers thank youarrow_forwardDetermining Gross Profit During the current year, merchandise is sold for $11,750,000. The cost of the goods sold is $7,050,000. a. What is the amount of the gross profit?$ b. Compute the gross profit percentage (gross profit divided by sales). Round to the nearest whole number. % c. When will the income statement report net income?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License