Typewritten answers only, please, no handwritten answers. Thank you. The beginni
ID: 2338214 • Letter: T
Question
Typewritten answers only, please, no handwritten answers. Thank you.
The beginning account balances for Terry’s Auto Shop as of January 1, 2018, follows:
The following events affected the company during the 2018 accounting period:
Purchased merchandise on account that cost $4,260.
The goods in Event 1 were purchased FOB shipping point with freight cost of $285 cash.
Returned $420 of damaged merchandise for credit on account.
Agreed to keep other damaged merchandise for which the company received an $265 allowance.
Sold merchandise that cost $2,600 for $4,840 cash.
Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $115 cash.
Paid $2,990 on the merchandise purchased in Event 1.
Prepare an income statement and a statement of cash flows for 2018. (Assume that closing entries have been made.)
Prepare an income statement.
Prepare a statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.)
Typewritten answers only, please, no handwritten answers. Thank you.
Account Titles Beginning Balances Cash $ 6,040 Inventory 3,180 Common Stock 7,430 Retained Earnings 1,790Explanation / Answer
TERRY'S AUTO SHOP Income Statement For the Year Ended December 31, 2018 Net Sales 4,840 Cost of goods sold 2,600 Gross Margin 2,240 Operating Expense Transportation-out 115 Net Income 2,125 TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flow From Operating activities Cash Inflow from Customers 4,840 Cash Outflow for expenses -115 Cash Outflow for inventory -3,295 Net Cash Flow From Operating activities 1,430 Cash Flow From Investing activities 0 Cash Flow From Financing activities 0 Net Change in Cash 1,430 Plus:Beginning Cash Balance 6180 Ending Cash Balance 7,610
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.