I am having trouble with this problem that is due tonight. Can someone please help!! I am unsure what to do with the information given after the adjusted trial balance. Do I add those numbers into the adjusted trial balance or what do I do with them? HELP!!
BizKid Company’s adjusted trial balance on August 31, 2005, its fiscal year-end, follows:
Debit Credit
Merchandise inventory $ 31,000
Noninventory assets 120,400
Total liabilities $ 35,000
N. Kidman, Capital 101,650
N. Kidman, Withdrawals 8,000
Sales 212,000
Sales discounts 3,250
Sales returns&allowances 14,000
Cost of goods sold 82,600
Sales salaries expense 29,000
Rent expense 10,000
Store supplies expense 2,500
Advertising expense 18,000
Office salaries expense 26,500
Rent expense—Office space 2,600
Office supplies expense 800
Totals $348,650 $348,650
On August 31, 2004, merchandise inventory was $25,000. Supplementary records of merchandising
activities for the year ended August 31, 2005, reveal the following itemized costs:
Invoice cost of merchandise purchases $91,000
Purchase discounts received 1,900
Purchase returns and allowances 4,400
Costs of transportation-in 3,900
Required
1. Compute the company’s net sales for the year.
2. Compute the company’s total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for selling expenses
and for general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold,
selling expenses, and general and administrative expenses
2 answers