FUNDAMENTAL ACCT PRIN CONNECT ACCESS
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
24th Edition
ISBN: 9781266494604
Author: Wild
Publisher: MCG
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Chapter 5, Problem 3BPSB
To determine

Concept Introduction:

Net Sales:

The net sales can be defined as sales after subtracting sales discounts and sales returns and allowances. The net sales are the sales which actually took place. The net sales are calculated as −

  Net Sales = Sales – Sales Discounts – Sales returns and allowances

To compute:

The Company's net sales

Expert Solution
Check Mark

Answer to Problem 3BPSB

Net Sales = $ 306,775

Explanation of Solution

The net sales are calculated as −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  •   Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

To determine

Concept Introduction:

Total cost of Merchandise:

Cost of merchandise can be defined as the total cost incurred to purchase the goods. The cost of merchandise is calculated after subtracting purchase discounts received and purchases returns and allowances from Invoice cost of merchandise purchase and adding cost of transportation to it.

  Total cost of merchandise = Invoice cost of merchandise  – (Purchase Discounts received+ Purchase returns and allowances)                                              + Cost of transportation-in

To Compute:

The Company's total cost of merchandise

The Company's total cost of merchandise = $ 134,600

The Company's total cost of merchandise is calculated as under −

Given,

  • Invoice cost of merchandise purchase = $ 138,500
  • Purchase Discounts received = $ 2,950
  • Purchase returns and allowances = $6,700
  • Cost of transportation-in = $ 5,750
  •   Total cost of merchandise = Invoice cost of merchandise  – (Purchase Discounts received+ Purchase returns and allowances)                                              + Cost of transportation-in

  Total cost of merchandise = $ 138,500 - $ 2,950 - $ 6,700 + $ 5,750Total cost of merchandise = $ 134,600

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

    Barkley Company
    Income Statement
    For the year Ended March 31, 201X
    Sales332,650
    Less:
    Sales Discounts
    5,875
    Sales returns and allowances
    20,000
    25,875
    Net Sales306,775
    Less: Cost of goods sold
    115,600
    Gross profit191,175
    Expenses
    Selling expenses
    Sales Salaries Expenses
    44,500
    Rent expense - Selling space
    16,000
    Store supplies expenses
    3,850
    Advertising Expense
    26,000
    Total selling expenses90,350
    General and administrative expenses
    Office salaries expense
    40,750
    Rent expense - Office space
    3,800
    Office Supplies Expense
    1,100
    Total general and administrative expenses45,650
    Total Expenses136,000
    Net Income55,175

The above income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  •   Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Gross Profit = Net Sales – Cost of Goods SoldGross Profit = $ 306,774 – $ 115,600Gross Profit = $ 191,175Total selling expenses = (Sales Salaries Expenses +Rent expense - Selling space + Store supplies expenses + Advertising Expense)Total selling expenses = $ 44,500 + $ 16,000 + $ 3,850 + $ 26,000Total selling expenses = $ 90,350Total general and administrative expenses = (Office salaries expense + Rent expense - Office space                                                                       + Office Supplies Expense)Total general and administrative expenses = $ 40,750 + $ 3,800 + $ 1,100Total general and administrative expenses = $ 45,650Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 90,350 + $ 45,650Total Expenses = $ 136,000Net Income = Gross profit – Total expensesNet Income = $ 191,175 - $ 136,000Net Income = $ 55,175

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Single-step Income statement that includes categories like net sales, cost of goods sold, selling expenses, and general and administrative expenses

    Barkley Company
    Income Statement
    For the year Ended March 31, 201X
    Net Sales306,775
    Less:
    Expenses
    Cost of goods sold
    115,600
    Total selling expenses
    90,350
    Total general and administrative expenses
    45,650
    Total expenses251,600
    Net Income55,175

The single step income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  • The net sales were calculated −

      Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Total expenses = (Cost of Goods sold + Total selling expenses                           + Total general and administrative expenses)Total expenses = $ 115,600 + $ 90,350 + $ 45,650Total expenses = $ 251,600Net Income = Net Sales – Total ExpensesNet Income = $ 306,775 - $ 251,600Net Income = $ 55,175

Expert Solution
Check Mark

Answer to Problem 3BPSB

The Company's total cost of merchandise = $ 134,600

The Company's total cost of merchandise is calculated as under −

Given,

  • Invoice cost of merchandise purchase = $ 138,500
  • Purchase Discounts received = $ 2,950
  • Purchase returns and allowances = $6,700
  • Cost of transportation-in = $ 5,750
  •   Total cost of merchandise = Invoice cost of merchandise  – (Purchase Discounts received+ Purchase returns and allowances)                                              + Cost of transportation-in

  Total cost of merchandise = $ 138,500 - $ 2,950 - $ 6,700 + $ 5,750Total cost of merchandise = $ 134,600

Explanation of Solution

The Company's total cost of merchandise is calculated as under −

Given,

  • Invoice cost of merchandise purchase = $ 138,500
  • Purchase Discounts received = $ 2,950
  • Purchase returns and allowances = $6,700
  • Cost of transportation-in = $ 5,750
  •   Total cost of merchandise = Invoice cost of merchandise  – (Purchase Discounts received+ Purchase returns and allowances)                                              + Cost of transportation-in

  Total cost of merchandise = $ 138,500 - $ 2,950 - $ 6,700 + $ 5,750Total cost of merchandise = $ 134,600

To determine

Concept Introduction:

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Multi step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution
Check Mark

Answer to Problem 3BPSB

    Barkley Company
    Income Statement
    For the year Ended March 31, 201X
    Sales332,650
    Less:
    Sales Discounts
    5,875
    Sales returns and allowances
    20,000
    25,875
    Net Sales306,775
    Less: Cost of goods sold
    115,600
    Gross profit191,175
    Expenses
    Selling expenses
    Sales Salaries Expenses
    44,500
    Rent expense - Selling space
    16,000
    Store supplies expenses
    3,850
    Advertising Expense
    26,000
    Total selling expenses90,350
    General and administrative expenses
    Office salaries expense
    40,750
    Rent expense - Office space
    3,800
    Office Supplies Expense
    1,100
    Total general and administrative expenses45,650
    Total Expenses136,000
    Net Income55,175

The above income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  •   Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Gross Profit = Net Sales – Cost of Goods SoldGross Profit = $ 306,774 – $ 115,600Gross Profit = $ 191,175Total selling expenses = (Sales Salaries Expenses +Rent expense - Selling space + Store supplies expenses + Advertising Expense)Total selling expenses = $ 44,500 + $ 16,000 + $ 3,850 + $ 26,000Total selling expenses = $ 90,350Total general and administrative expenses = (Office salaries expense + Rent expense - Office space                                                                       + Office Supplies Expense)Total general and administrative expenses = $ 40,750 + $ 3,800 + $ 1,100Total general and administrative expenses = $ 45,650Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 90,350 + $ 45,650Total Expenses = $ 136,000Net Income = Gross profit – Total expensesNet Income = $ 191,175 - $ 136,000Net Income = $ 55,175

Explanation of Solution

The above income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  •   Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Gross Profit = Net Sales – Cost of Goods SoldGross Profit = $ 306,774 – $ 115,600Gross Profit = $ 191,175Total selling expenses = (Sales Salaries Expenses +Rent expense - Selling space + Store supplies expenses + Advertising Expense)Total selling expenses = $ 44,500 + $ 16,000 + $ 3,850 + $ 26,000Total selling expenses = $ 90,350Total general and administrative expenses = (Office salaries expense + Rent expense - Office space                                                                       + Office Supplies Expense)Total general and administrative expenses = $ 40,750 + $ 3,800 + $ 1,100Total general and administrative expenses = $ 45,650Total Expenses = Total selling expenses + Total general and administrative expensesTotal Expenses = $ 90,350 + $ 45,650Total Expenses = $ 136,000Net Income = Gross profit – Total expensesNet Income = $ 191,175 - $ 136,000Net Income = $ 55,175

To determine

Income Statement:

The income statement can be explained as the statement giving details about the revenues, incomes, gains and expenses, losses etc. The income statement is prepared to determine net income or loss of the business by listing all the revenues, gains and expenses and losses of the business. It can be single step income statement as well multi step income statement.

To prepare:

Single-step Income statement that includes categories like net sales, cost of goods sold, selling expenses, and general and administrative expenses

Expert Solution
Check Mark

Answer to Problem 3BPSB

    Barkley Company
    Income Statement
    For the year Ended March 31, 201X
    Net Sales306,775
    Less:
    Expenses
    Cost of goods sold
    115,600
    Total selling expenses
    90,350
    Total general and administrative expenses
    45,650
    Total expenses251,600
    Net Income55,175

The single step income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  • The net sales were calculated −

      Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Total expenses = (Cost of Goods sold + Total selling expenses                           + Total general and administrative expenses)Total expenses = $ 115,600 + $ 90,350 + $ 45,650Total expenses = $ 251,600Net Income = Net Sales – Total ExpensesNet Income = $ 306,775 - $ 251,600Net Income = $ 55,175

Explanation of Solution

The single step income statement is prepared as under −

Given,

  • Sales = $ 332,650
  • Sales discounts = $ 5,875
  • Sales returns and allowances = $ 20,000
  • Cost of goods sold = $ 115,600
  • Sales Salaries Expenses = $ 44,500
  • Rent expense - Selling space = $ 16,000
  • Store supplies expenses = $ 3,850
  • Advertising Expense = $ 26,000
  • Office salaries expense = $ 40,750
  • Rent expense - Office space = $ 3,800
  • Office Supplies Expense = $ 1,100
  • The net sales were calculated −

      Net Sales = Sales – Sales Discounts – Sales returns and allowancesNet Sales = $ 332,650 - $ 5,875 - $ 20,000Net Sales = $ 306,775

  Total expenses = (Cost of Goods sold + Total selling expenses                           + Total general and administrative expenses)Total expenses = $ 115,600 + $ 90,350 + $ 45,650Total expenses = $ 251,600Net Income = Net Sales – Total ExpensesNet Income = $ 306,775 - $ 251,600Net Income = $ 55,175

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Chapter 5 Solutions

FUNDAMENTAL ACCT PRIN CONNECT ACCESS

Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Refer to the income statement of Samsung in...Ch. 5 - Prob. 15DQCh. 5 - Applying merchandising terms C1 P1 Enter the...Ch. 5 - Identifying inventory costs C2 Costs of $5.000...Ch. 5 - Merchandise accounts and computations C2 Use the...Ch. 5 - Computing net invoice amounts P1 Compute the...Ch. 5 - Recording purchases, returns, and discounts taken...Ch. 5 - Recording purchases and discounts taken P1 Prepare...Ch. 5 - Recording purchases and discounts missed Pl...Ch. 5 - Recording sales, returns, and discounts taken P2...Ch. 5 - Accounting for shrinkage—perpetual system P3...Ch. 5 - Closing entries P3 Refer to QS 5-9 and prepare...Ch. 5 - Multiple-step income statement P4 For each item...Ch. 5 - Preparing a multiple-step income statement P4...Ch. 5 - Exercise 5-13 Physical count error and profits A2...Ch. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Recording purchases, returns, and...Ch. 5 - Recording sales. returns, and discounts—periodic &...Ch. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - QS 5-23 Sales transactions P2 Prepare journal...Ch. 5 - Exercise 5-1 Computing revenues, expenses, and...Ch. 5 - Prob. 2ECh. 5 - Exercise 5-3 Recording purchases, purchases...Ch. 5 - Exercise 5-4 Recording sales, sales returns, and...Ch. 5 - Exercise 5.5 Recording purchases, purchases...Ch. 5 - Exercise 5-6 Recording sales, purchases, and cash...Ch. 5 - Exercise 5-7 Recording sales, purchases, shipping,...Ch. 5 - Exercise 5-8 Inventory and cost of sales...Ch. 5 - Exercise 5-9 Recording purchases, sales, returns,...Ch. 5 - Exercise 5-10 Preparing adjusting and closing...Ch. 5 - Prob. 11ECh. 5 - Exercise 5-12 Impacts of inventory error on key...Ch. 5 - Exercise 5-13 Physical count error and profits...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Prob. 21ECh. 5 - Prob. 22ECh. 5 - Prob. 23ECh. 5 - Prob. 24ECh. 5 - Prob. 25ECh. 5 - Problem 5-1A Preparing journal entries for...Ch. 5 - Problem 5-2A Preparing journal entries for...Ch. 5 - Problem 5-3A Computing merchandising amounts and...Ch. 5 - Problem 5-4A Preparing closing entries and...Ch. 5 - Prob. 5APSACh. 5 - Problem 5-1 B Preparing journal entries for...Ch. 5 - Problem 5-2B Preparing journal entries for...Ch. 5 - Problem 5-3B Computing merchandising amounts and...Ch. 5 - Problem 5-4B Preparing closing entries and...Ch. 5 - Problem 5-5B Preparing adjusting entries and...Ch. 5 - SP 5 Santana Rey created Business Solutions on...Ch. 5 - Prob. 1GLPCh. 5 - Prob. 2GLPCh. 5 - Prob. 3GLPCh. 5 - Prob. 1AACh. 5 - Key comparative figures for Apple and Google...Ch. 5 - Prob. 3AACh. 5 - Prob. 1BTNCh. 5 - Prob. 2BTNCh. 5 - Prob. 3BTNCh. 5 - Prob. 4BTNCh. 5 - Prob. 5BTNCh. 5 - Prob. 6BTN
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