At the end of Gordman Department Store\'s fiscal year on December 31, 2011, thes

Question

At the end of Gordman Department Store's fiscal year on December 31, 2011, these accounts appeared in its adjusted trial balance.

Freight-in $5,600
Merchandise Inventory 40,500
Purchases 447,000
Purchase Discounts 12,000
Purchases Returns and Allowances 6,400
Sales 718,000
Sales Returns and Allowances 8,000

Additional facts:

1. Merchandise inventory on December 31, 2011, is $75,000.
2. Note that Gordman Department Store uses a periodic system.

Complete the income statement through gross profit for the year ended December 31, 2011. (List amounts from largest to smallest eg 10, 5, 3, 2.)

GORDMAN DEPARTMENT STORE
Income Statement
For the Year Ended December 31, 2011
Sales Revenues
$
Less:

Net sales

Cost of goods sold
$
$
Less: $





Net purchases
Add:


Cost of goods purchased


Cost of goods available for sale



Cost of goods sold

Gross profit

$

Explanation / Answer

GordMan Departmental Stores Sales Revenue 718000 Less : returns 8000 Net Sales 710000 Less : Cost of Goods Sold: Opening Inventory 40500 (A) Add:Purchases 447000 Less:Discounts -12000 Less :Purchase Returns and Allowances -6400 Add:Freight In 5600 Net Purchases 434200 434200 (B) Less : Closing Inventory -75000 ( C ) Cost Of Goods Sold 399700 Hence, Net Sales 71000 Less: Cost of Goods Sold -399700 Gross Profit -328700

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