Calculate cost of goods sold for each of the 2013, 2014, and 2015 fiscal years.
ID: 2416108 • Letter: C
Question
Calculate cost of goods sold for each of the 2013, 2014, and 2015 fiscal years. Calculate the gross profit for each of the 2013, 2014, and 2015 fiscal years Calculate the ending balance of accounts payable for each of the 2013, 2014, and 2015 fiscal years. The vice presidents of sales, marketing, production, and finance are discussing the company's results with the CEO. They note that sales declined in fiscal 2015. They wonder whether that means that profitability, as measured by the gross profit rate, necessarily also declined, Explain, calculating the gross profit rate for each fiscal year to help support your answer. At the beginning of the current season on November 1, the ledger of Winona sports showed cash $3,300, Inventory $4,700, and common stock $8,000. The following transactions occurred during November 2014. Purchased hockey sticks and pucks on account from Hi-Stick Co. $1,600, terms 2/10, n/60. Paid freight on Hi-Stick Co. purchases $90. Received credit from Hi-Stick Co. for merchandise returned $350. Sold merchandise on account for $1,000, terms n/30. Purchased gloves, socks, and other accessories on account from Twin City Sportswear $945, terms 1/10, n/30. Paid Hi-Stick Co. in full. Received credit from Twin City Sportswear for merchandise returned $45. Made sales on account for $1,330, terms n/30. Paid Twin City Sportswear in full.Explanation / Answer
A Journal entries for transactions of Winona sports
Amount ($)
Narration
Date
Particulars
Lf/No
Dr
Cr
Nov 5th
Inventory A/c Dr
$ 1,600
Purchased hockey sticks on credit
To Hi Stick Co A/c
$ 1,600
Nov 7th
Freight Expenses A/c Dr
$ 90
Paid freight on Hitech purchases made
To Cash A/c
$ 90
Purchases returned and debit note raised
Nov 9th
Hi Stick Co A/c Dr
$ 350
To Inventory Returns A/c
$ 350
Adjustment entry for purchases with Inventory Returns A/c
Nov 9th
Inventory Returns A/c Dr
$ 350
To Inventory A/c
$ 350
Nov 10th
Customer A/c Dr
$ 1,000
Sales made to customer on credit
To Sales A/c
$ 1,000
Nov 12th
Inventory A/c Dr
$ 945
Credit purchases from twincity sportswear
To TwinCity Sportswear A/c
$ 945
Nov 14th
Hitech Co A/c Dr
$ 1,250
Paid in full the due amount to Hitech Co for credit purchases
To Cash A/c
$ 1,250
Nov 17th
Twincity Sportswear A/c Dr
$ 45
Purchases returned and debit note raised
To Inventory Returns A/c
$ 45
Nov 17th
Inventory Returns A/c Dr
$ 45
Adjustment entry for purchases with Inventory Returns A/c
To Inventory A/c
$ 45
Nov 20th
Customer A/c Dr
$ 1,330
Sales made to customer on credit
To Sales A/c
$ 1,330
Nov 21st
Twincity sportswear A/c Dr
$ 900
Paid in full the due amount toTwincity sportswear Co for credit purchases
To Cash A/c
$ 900
Dec 31st
Profit and Loss A/c Dr
$ 6,850
To Inventory A/c
$ 6,850
Dec 31st
Sales A/c Dr
$ 2,330
To Profit and Loss A/c
$ 2,330
Dec 31st
Profit and Loss A/c Dr
$ 90
To Freight expenses A/c
$ 90
Accounts before Closing on Nov 31st
Cash A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 1st
To Bal B/d
$ 3,300
Nov 5th
By Freight expenses A/c
$ 90
Nov 14th
By Hitech Co A/c
$ 1,250
Nov 21st
By twincity Sportswear A/c
$ 900
Nov 31st
By Bal C/d
$ 1,060
Total
$ 3,300
Total
$ 3,300
Inventory A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 1st
To Bal B/d
$ 4,700
Nov 9th
By Inventory Returns A/c
$ 350
Nov 5th
To Hitech Co A/c
$ 1,600
Nov 17th
By Inventory Returns A/c
$ 45
Nov 12th
To Twincity Sportswear A/c
$ 945
Nov 31st
By Bal C/d
$ 6,850
Total
$ 7,245
Total
$ 7,245
Dec 1st
To Bal B/d
$ 6,850
Dec 31st
By Profit and Loss A/c
$ 6,850
Total
$ 6,850
Total
$ 6,850
Sales A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 31st
To Bal C/d
$ 2,330
Nov 10th
To Customer A/c
$ 1,000
Nov 20th
To Customer A/c
$ 1,330
Total
$ 2,330
Total
$ 2,330
Dec 31st
To Profit and Loss A/c
$ 2,330
Dec 1st
To Bal B/d
$ 2,330
Total
$ 2,330
Total
$ 2,330
Trial Balance as on Nov 31st
Particulars
Debit
Credit
Common Stock
$ 8,000
Inventory
$ 6,850
Cash
$ 1,060
Frieght Expenses A/c
$ 90
Sales A/c
$ 2,330
Customer A/c
$ 2,330
Total
$ 10,330
$ 10,330
Income Statement for month ending Dec 31st
Profit and Loss A/c Extract
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Dec 31st
To Inventory A/c
$ 6,850
Dec 31st
By Sales A/c
$ 2,330
Dec 31st
To Freight Expense A/c
$ 90
Dec 31st
By Balance
$ 4,610
Total
$ 6,940
Total
$ 6,940
Balance sheet as on Dec 31st – Extract
Liabilities
Amount
Assets
Amount
Common Stock
$ 8,000
Fixed Assets
Retained Earnings
$ (4,610)
Equipment
$ -
Long Term liabilities
Current Assets
Notes Payable
$ -
Accounts Receivable
$ 2,330
Current Liabilities
Supplies
$ -
Accounts Payable
$ -
Prepaid Rent
$ -
Salaries Payable
$ -
Dividends
$ -
Accumulated Depreciation
$ -
Cash
$ 1,060
Unearned Rent Revenue
$ -
Interest Payable
$ -
Total
$ 3,390
Total
$ 3,390
A Journal entries for transactions of Winona sports
Amount ($)
Narration
Date
Particulars
Lf/No
Dr
Cr
Nov 5th
Inventory A/c Dr
$ 1,600
Purchased hockey sticks on credit
To Hi Stick Co A/c
$ 1,600
Nov 7th
Freight Expenses A/c Dr
$ 90
Paid freight on Hitech purchases made
To Cash A/c
$ 90
Purchases returned and debit note raised
Nov 9th
Hi Stick Co A/c Dr
$ 350
To Inventory Returns A/c
$ 350
Adjustment entry for purchases with Inventory Returns A/c
Nov 9th
Inventory Returns A/c Dr
$ 350
To Inventory A/c
$ 350
Nov 10th
Customer A/c Dr
$ 1,000
Sales made to customer on credit
To Sales A/c
$ 1,000
Nov 12th
Inventory A/c Dr
$ 945
Credit purchases from twincity sportswear
To TwinCity Sportswear A/c
$ 945
Nov 14th
Hitech Co A/c Dr
$ 1,250
Paid in full the due amount to Hitech Co for credit purchases
To Cash A/c
$ 1,250
Nov 17th
Twincity Sportswear A/c Dr
$ 45
Purchases returned and debit note raised
To Inventory Returns A/c
$ 45
Nov 17th
Inventory Returns A/c Dr
$ 45
Adjustment entry for purchases with Inventory Returns A/c
To Inventory A/c
$ 45
Nov 20th
Customer A/c Dr
$ 1,330
Sales made to customer on credit
To Sales A/c
$ 1,330
Nov 21st
Twincity sportswear A/c Dr
$ 900
Paid in full the due amount toTwincity sportswear Co for credit purchases
To Cash A/c
$ 900
Dec 31st
Profit and Loss A/c Dr
$ 6,850
To Inventory A/c
$ 6,850
Dec 31st
Sales A/c Dr
$ 2,330
To Profit and Loss A/c
$ 2,330
Dec 31st
Profit and Loss A/c Dr
$ 90
To Freight expenses A/c
$ 90
Accounts before Closing on Nov 31st
Cash A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 1st
To Bal B/d
$ 3,300
Nov 5th
By Freight expenses A/c
$ 90
Nov 14th
By Hitech Co A/c
$ 1,250
Nov 21st
By twincity Sportswear A/c
$ 900
Nov 31st
By Bal C/d
$ 1,060
Total
$ 3,300
Total
$ 3,300
Inventory A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 1st
To Bal B/d
$ 4,700
Nov 9th
By Inventory Returns A/c
$ 350
Nov 5th
To Hitech Co A/c
$ 1,600
Nov 17th
By Inventory Returns A/c
$ 45
Nov 12th
To Twincity Sportswear A/c
$ 945
Nov 31st
By Bal C/d
$ 6,850
Total
$ 7,245
Total
$ 7,245
Dec 1st
To Bal B/d
$ 6,850
Dec 31st
By Profit and Loss A/c
$ 6,850
Total
$ 6,850
Total
$ 6,850
Sales A/c
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Nov 31st
To Bal C/d
$ 2,330
Nov 10th
To Customer A/c
$ 1,000
Nov 20th
To Customer A/c
$ 1,330
Total
$ 2,330
Total
$ 2,330
Dec 31st
To Profit and Loss A/c
$ 2,330
Dec 1st
To Bal B/d
$ 2,330
Total
$ 2,330
Total
$ 2,330
Trial Balance as on Nov 31st
Particulars
Debit
Credit
Common Stock
$ 8,000
Inventory
$ 6,850
Cash
$ 1,060
Frieght Expenses A/c
$ 90
Sales A/c
$ 2,330
Customer A/c
$ 2,330
Total
$ 10,330
$ 10,330
Income Statement for month ending Dec 31st
Profit and Loss A/c Extract
Dr
Cr
Date
Particulars
Amount
Date
Particulars
Amount
Dec 31st
To Inventory A/c
$ 6,850
Dec 31st
By Sales A/c
$ 2,330
Dec 31st
To Freight Expense A/c
$ 90
Dec 31st
By Balance
$ 4,610
Total
$ 6,940
Total
$ 6,940
Balance sheet as on Dec 31st – Extract
Liabilities
Amount
Assets
Amount
Common Stock
$ 8,000
Fixed Assets
Retained Earnings
$ (4,610)
Equipment
$ -
Long Term liabilities
Current Assets
Notes Payable
$ -
Accounts Receivable
$ 2,330
Current Liabilities
Supplies
$ -
Accounts Payable
$ -
Prepaid Rent
$ -
Salaries Payable
$ -
Dividends
$ -
Accumulated Depreciation
$ -
Cash
$ 1,060
Unearned Rent Revenue
$ -
Interest Payable
$ -
Total
$ 3,390
Total
$ 3,390
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