Question 1

Which of the following should be classified as a General and Administrative Expense on a Multi-Step Income Statement?

Accepted Answer

Insurance Expense should be classified as a General and Administrative Expense because it is a cost incurred for the overall operation of the business and not directly related to the production of goods or services. Delivery Expense, Sales Salaries Expense, and Advertising Expense are all considered Selling Expenses because they relate directly to the promotion and sale of products or services.

Question 2

Teresa Davis is the owner of a convenience shop. The firm had a net income of $4,500 for the year. What accounts are debited and credited to transfer the net loss to the owner's capital account during the closing process?

Accepted Answer

The answer of Teresa Davis is the owner of a...

Question 3

At the end of the year Stan Still Stationery Store had the following balances: Sales $580,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $60,000. The Net Sales for the year are:

Accepted Answer

Net Sales = Sales - (Sales Discounts + Sales Returns and Allowances)
Net Sales = 580,000 - (2,540 + 14,280)
Net Sales = 563,180

Question 4

The adjusted trial balance data given below is from the Bennett Company's worksheet for the year ended December 31, 2013. The firm had net income of $100,000 for the year. Prepare a statement of owner's equity for the year. No additional investments were made during the period. $$\begin{array}{l}
\text { ADJUSTED TRIAL BALANCE }\
\begin{array} { | l | r | r | } 
\hline { \text { ACCOUNT NAME } } & \text { DEBIT } &  { \text { CREDIT } } \
\hline \text { Ben Bennett, Capital } & & 122,000 \
\hline \text { Ben Bennett, Drawing } & 30,000 & \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of The adjusted trial balance data given below...

Question 5

Jeannine Coulson is the owner of a book store. During the year she made withdrawals of cash totaling $9,000. What accounts are debited and credited to close the owner's drawing account?

Accepted Answer

The answer of Jeannine Coulson is the owner of a...

Question 6

On December 31, 2013, the Income Statement section of the worksheet is shown below. The balance of Ally Logan's drawing account is $16,000. Record the necessary closing entries on page 9 of a general journal. \[\begin{array} { | l | r | r | } 
\hline { \text { INCOME STATEMENT COLUMNS } } \
\hline \text { ACCOUNT NAME } & \text { DEBIT } & \text { CREDIT } \
\hline \text { Income Summary } & 47,000 & 53,000 \
\hline \text { Sales } & & 170,000 \
\hline \text { Sales Returns and Allowances } & 4,500 & \
\hline \text { Interest Income } & & 600 \
\hline \text { Purchases } & 71,000 & \
\hline \text { Freight In } & 2,300 & \
\hline \text { Purchases Returns and Allowances } & & 1,300 \
\hline \text { Purchases Discounts } & & 1,900 \
\hline \text { Sales Salaries Expense } & 37,000 & \
\hline \text { Office Salaries Expense } & 18,500 & \
\hline \text { Office Supplies Expense } & 700 & \
\hline \text { Utilities Expense } & 3,500 & \
\hline \text { Payroll Taxes Expense } & 1,100 & \
\hline \text { Uncollectible Accounts Expense } & 1,200 & \
\hline \text { Depr. Expense - Office Equipment } & 600 & \
\hline \text { Totals } & 187,400 & 226,800 \
\hline \text { Net Income } & \underline { 39,400 } & \
\hline & \underline { 226,800 } & \underline { \underline { 226,800 } } \
\hline
\end{array}\]

Accepted Answer

The answer of On December 31, 2013, the Income Statement...

Question 7

The adjusted trial balance data given below is from the Hampton Company's worksheet for the year ended December 31, 2014. The firm had net income of $38,000 for the year. Prepare a statement of owner's equity for the year. No additional investments were made during the period. $$\begin{array}{l}
\text { ADJUSTED TRIAL BALANCE }\
\begin{array} { | l | r | r | } 
\hline  { \text { ACCOUNT NAME } } & \text { DEBIT } & { \text { CREDIT } } \
\hline \text { Lloyd Hampton, Capital (Jan. 1) } & & 62,000 \
\hline \text { Lloyd Hampton, Drawing } & 31,500 & \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of The adjusted trial balance data given below...

Question 8

A classified income statement showed net sales of $435,000, cost of goods sold of $188,000, and total operating expenses of $165,000 for the fiscal year ended June 30, 2013.
1. What was the gross profit on sales?
2. What was the net income from operations?

Accepted Answer

The answer of A classified income statement showed net sales...

Question 9

The owner of a firm had capital of $85,000 on January 1, 2013, and made withdrawals of $33,000 during 2013. The business earned a net income of $45,000 for the year.
1. What amount of capital was shown as of December 31, 2013, on the statement of owner's equity?
2. How much was the increase or decrease in capital for the year?

Accepted Answer

The answer of The owner of a firm had capital...

Question 10

The adjusted trial balance data given below is from the Morgan Company's worksheet for the year ended December 31, 2014. Prepare a classified income statement for the year ended December 31, 2014. The expense accounts numbered 611-615 represent selling expenses, and those numbered 621-631 represent general and administrative expenses. \[\begin{array} { | l | l | r | r | } 
\hline  { \text { ADJUSTED TRIAL BALANCE } } \
\hline \begin{array} { c } 
\text { ACCT. } \
\text { NO. }
\end{array} & { \text { ACCOUNT NAME } } & \text { DEBIT } & \text { CREDIT } \
\hline 399 & \text { Income Summary } & 62,000 & 57,000 \
\hline 401 & \text { Sales } & & 250,000 \
\hline 451 & \text { Sales Returns and Allowances } & 4,500 & \
\hline 491 & \text { Interest Income } & & 750 \
\hline 501 & \text { Purchases } & 125,000 & \
\hline 502 & \text { Freight In } & 3,000 & \
\hline 503 & \text { Purchases Returns and Allowances } & & 1,600 \
\hline 504 & \text { Purchases Discounts } & & 1,900 \
\hline 611 & \text { Sales Salaries Expense } & 59,000 & \
\hline 613 & \text { Advertising Expense } & 2,100 & \
\hline 615 & \text { Travel Expense } & 11,500 & \
\hline 621 & \text { Office Salaries Expense } & 18,300 & \
\hline 623 & \text { Office Supplies Expense } & 750 & \
\hline 625 & \text { Utilities Expense } & 4,500 & \
\hline 627 & \text { Payroll Taxes Expense } & 1,500 & \
\hline 629 & \text { Uncollectible Accounts Expense } & 1,350 & \
\hline 631 & \text { Depreciation Expense - Office Equipment } & 550 & \
\hline 691 & \text { Interest Expense } & 1,600 & \
\hline
\end{array}\]

Accepted Answer

The answer of The adjusted trial balance data given below...

Question 11

A firm had merchandise inventory of $30,000 on January 1, 2013, and had purchases of $45,000, freight in of $600, purchases returns and allowances of $2,300, and purchases discounts of $1,000 during 2013. The firm had merchandise inventory of $27,000 on December 31, 2013.
1. What net delivered cost of purchases was shown for the year ended December 31, 2013, on the classified income statement?
2. What was the cost of goods sold?

Accepted Answer

The answer of A firm had merchandise inventory of $30,000...

Question 12

Brianna Graham is the owner of a dress shop. The firm had a net loss of $9,000 for the year. What accounts are debited and credited to transfer the net loss to the owner's capital account during the closing process?

Accepted Answer

The answer of Brianna Graham is the owner of a...

Question 13

Cost of Goods Sold is classified as a(n)

Accepted Answer

Cost of Goods Sold is a type of expense account, which represents the direct costs associated with producing and selling goods. It includes the cost of materials, labor, and other expenses incurred in the production process.

Question 14

The adjusted trial balance data given below is from the Saugatuck Craft's worksheet for the year ended December 31, 2013. The firm had a net loss of $30,000 for the year. Prepare a statement of owner's equity for the year. No additional investments were made during the period. $$\begin{array}{l}
\text { ADJUSTED TRIAL BALANCE }\
\begin{array} { | l | r | r | } 
\hline  { \text { ACCOUNT NAME } } & \text { DEBIT } &  { \text { CREDIT } } \
\hline \text { Sally Saugatuck, Capital } & & 52,000 \
\hline \text { Sally Saugatuck, Drawing } & 3,000 & \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of The adjusted trial balance data given below...

Question 15

For the current fiscal year, Purchases were $245,000, Purchase Returns and Allowances were $8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If the beginning merchandise inventory was $60,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is:

Accepted Answer

The answer of For the current fiscal year, Purchases were...

Question 16

The owner of a firm had capital of $170,000 on January 1, 2014, and made withdrawals of $66,000 during 2014. The business earned a net income of $90,000 for the year.
1. What amount of capital was shown as of December 31, 2014, on the statement of owner's equity?
2. How much was the increase or decrease in capital for the year?

Accepted Answer

The answer of The owner of a firm had capital...

Question 17

The adjusted trial balance data given below is from Cameron White Company's worksheet for the year ended December 31, 2013. The balance of the Notes Payable account consists of notes that are due within a year. The mortgage extends for more than a year. Prepare a classified balance sheet as of December 31, 2013. The ending capital for the period from the statement of owner's equity is $56,150. \[\begin{array} { | l | r | r | } 
\hline { \text { ADJUSTED TRIAL BALANCE } } \
\hline { \text { ACCOUNT NAME } } & { \text { DEBIT } } & \text { CREDIT } \
\hline \text { Cash } & \$ 7,700 & \
\hline \text { Petty Cash Fund } & 100 & \
\hline \text { Notes Receivable } & 2,000 & \
\hline \text { Accounts Receivable } & 13,500 & \
\hline \text { Allowance for Doubtful Accounts } & & \$ 1,100 \
\hline \text { Merchandise Inventory } & 51,000 & \
\hline \text { Office Supplies } & 450 & \
\hline \text { Prepaid Insurance } & 1,900 & \
\hline \text { Land } & 8,000 & \
\hline \text { Building } & 28,000 & \
\hline \text { Accumulated Depreciation - Building } & & 7,000 \
\hline \text { Store Equipment } & 6,500 & \
\hline \text { Accumulated Depreciation - Store Equipment } & & 2,500 \
\hline \text { Office Equipment } & 4,500 & \
\hline \text { Accumulated Depreciation - Office Equipment } & & 1,500 \
\hline \text { Notes Payable--Short-Term } & & 12,500 \
\hline \text { Accounts Payable } & & 16,500 \
\hline \text { Interest Payable } & & 400 \
\hline \text { Mortgage Payable } & & 26,000 \
\hline
\end{array}\]

Accepted Answer

The answer of The adjusted trial balance data given below...

Question 18

A classified income statement showed net sales of $870,000, cost of goods sold of $376,000, and total operating expenses of $330,000 for the fiscal year ended December 31, 2013.
1. What was the gross profit on sales?
2. What was the net income from operations?

Accepted Answer

The answer of A classified income statement showed net sales...

Question 19

A firm had merchandise inventory of $60,000 on January 1, 2014, and had purchases of $90,000, freight in of $1,200, purchases returns and allowances of $4,600, and purchases discounts of $2,000 during 2014. The firm had merchandise inventory of $54,000 on December 31, 2014.
1. What net delivered cost of purchases was shown for the year ended December 31, 2014, on the classified income statement?
2. What was the cost of goods sold?

Accepted Answer

The answer of A firm had merchandise inventory of $60,000...

Question 20

Allyse Petry is the owner of a boutique. During the year she made withdrawals of cash totaling $25,000. What accounts are debited and credited to close the owner's drawing account?

Accepted Answer

The answer of Allyse Petry is the owner of a...

Quiz 13: Financial Statements and Closing Procedures

Which of the following should be classified as a General and Administrative Expense on a Multi-Step Income Statement?

Teresa Davis is the owner of a convenience shop. The firm had a net income of $4,500 for the year. What accounts are debited and credited to transfer the net loss to the owner's capital account during the closing process?

At the end of the year Stan Still Stationery Store had the following balances: Sales $580,000; Sales Discounts $2,540; Sales Returns and Allowances $14,280; Sales Salaries Expense $60,000. The Net Sales for the year are:

Jeannine Coulson is the owner of a book store. During the year she made withdrawals of cash totaling $9,000. What accounts are debited and credited to close the owner's drawing account?

A classified income statement showed net sales of $435,000, cost of goods sold of $188,000, and total operating expenses of $165,000 for the fiscal year ended June 30, 2013. 1. What was the gross profit on sales? 2. What was the net income from operations?

Brianna Graham is the owner of a dress shop. The firm had a net loss of $9,000 for the year. What accounts are debited and credited to transfer the net loss to the owner's capital account during the closing process?

Cost of Goods Sold is classified as a(n)

For the current fiscal year, Purchases were $245,000, Purchase Returns and Allowances were $8,600, Purchase Discounts were $2,200 and Freight In was $32,000. If the beginning merchandise inventory was $60,000 and the ending merchandise inventory was $75,000, the Cost of Goods Sold is:

A classified income statement showed net sales of $870,000, cost of goods sold of $376,000, and total operating expenses of $330,000 for the fiscal year ended December 31, 2013. 1. What was the gross profit on sales? 2. What was the net income from operations?

Allyse Petry is the owner of a boutique. During the year she made withdrawals of cash totaling $25,000. What accounts are debited and credited to close the owner's drawing account?