Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 6, Problem 11AP
1.
To determine
Prepare a multistep income statement.
2.
To determine
Explain the manner in which Company W’s income statement can be used to evaluate the company’s profitability and state about the other financial statements that must be considered.
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Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling
expenses: sales salaries expense, rent expense-selling space, store supplies expense, and advertising expense. It categorizes the
remaining expenses as general and administrative.
Debit
Credit
Merchandise inventory (ending)
Other (noninventory) assets
$38,000
152,000
Total liabilities
$ 43,890
51,152
74,433
Common stock
Retained earnings
Dividends
8,000
Sales
259,920
Sales discounts
3,977
17,155
100,577
35,609
12,216
3,119
22,093
32,490
3,119
1,040
$429,395
Sales returns and allowances
Cost of goods sold
Sales salaries expense
Rent expense-Selling space
Store supplies expense
Advertising expense
Office salaries expense
Rent expense-Office space
Office supplies expense
Totals
$429,395
Beginning merchandise inventory was $30,666. Supplementary records of merchandising activities for the year ended August 31
reveal the following itemized costs.
Invoice cost…
[The following information applies to the questions displayed below.]Valley Company’s adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense—selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.
Adjusted Account Balances
Debit
Credit
Merchandise inventory (ending)
$ 31,500
Other (non-inventory) assets
126,000
Total liabilities
$ 36,383
Common stock
63,738
Retained earnings
42,403
Dividends
8,000
Sales
215,460
Sales discounts
3,297
Sales returns and allowances
14,220
Cost of goods sold
84,041
Sales salaries expense
29,518
Rent expense—Selling space
10,127
Store supplies expense
2,586
Advertising expense
18,314
Office salaries expense
26,933
Rent expense—Office space
2,586
Office supplies expense
862…
Valley Company's adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It
categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store
supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.
A
Adjusted Account Balances
Merchandise inventory (ending)
Other (non-inventory) assets
Total liabilities
K. Valley, Capital
K. Valley, Withdrawals
Sales
Sales discounts
Sales returns and allowances
Cost of goods sold
Sales salaries expense
Rent expense-Selling space
Store supplies expense
Advertising expense
Office salaries expense
Rent expense-Office space
Office supplies expense
Totals
Debit
$ 41,000
130, 400
Invoice cost of merchandise purchases
Purchases discounts received
Purchases returns and allowances
Costs of transportation-in
Credit
$ 25,000
104,550
225,600
8,000
2,250
12,000
74,500
32,000
8,000
1,500
13,000
28,500
3,600
400
$ 355, 150 $…
Chapter 6 Solutions
Principles of Accounting
Ch. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Assume a large shipment of uninsured merchandise...Ch. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Indicate whether each of the statements that...Ch. 6 - Prob. 2SECh. 6 - Prob. 3SE
Ch. 6 - Prob. 4SECh. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Record the following transactions using T...Ch. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Sutton Hills Companys management made the...Ch. 6 - Prob. 2EACh. 6 - A company has the following data: net sales,...Ch. 6 - Prob. 4EACh. 6 - Prob. 5EACh. 6 - Linear Company engaged in the following...Ch. 6 - Prob. 7EACh. 6 - Prob. 8EACh. 6 - Prob. 9EACh. 6 - Prob. 10EACh. 6 - Prob. 11EACh. 6 - Prob. 12EACh. 6 - Prob. 13EACh. 6 - Prob. 14EACh. 6 - Prob. 15EACh. 6 - Matuska Tools Corporations income statements...Ch. 6 - Selected accounts from Murrays Furniture Stores...Ch. 6 - Prob. 3PCh. 6 - Selected accounts from Dences Gourmet Shops...Ch. 6 - Prob. 5PCh. 6 - Teague Company engaged in the following...Ch. 6 - Prob. 7APCh. 6 - Prob. 8APCh. 6 - Prob. 9APCh. 6 - Prob. 10APCh. 6 - Prob. 11APCh. 6 - Prob. 12APCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Prob. 3CCh. 6 - Prob. 4CCh. 6 - Prob. 5CCh. 6 - Prob. 6C
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