MENDELSTEIN COMPANY Income Statement For Year Ended October 31, 2014 Revenues: T
ID: 2544245 • Letter: M
Question
MENDELSTEIN COMPANY Income Statement For Year Ended October 31, 2014 Revenues: Total revenues Expenses: Total expenses
Present a multiple-step income statement that lists the company’s net sales, cost of goods sold, and gross profit from sales.
Present a condensed single-step income statement that lists these expenses: cost of goods sold, selling expenses, and general and administrative expenses.
Debit Credit Merchandise inventory $ 1,100 Other assets 34,000 Liabilities $ 30,340 Joe Mendelstein, capital 37,105 Joe Mendelstein, withdrawals 2,400 Interest revenue 120 Sales 90,400 Sales returns and allowances 6,900 Sales discounts 1,065 Purchases 42,900 Purchase returns and allowances 1,850 Purchase discounts 840 Transportation-in 4,750 Sales salaries expense 17,200 Rent expense, selling space 8,600 Store supplies expense 2,600 Advertising expense 8,400 Office salaries expense 21,400 Rent expense, office space 7,000 Office supplies expense 2,340 Totals $ 160,655 $ 160,655Explanation / Answer
1) Calculation of Net Sales :-
= Sales - Sales Return and Allownces - Sales Discount
= $90400 - $6900 - $1065
= $82435
2) Calculation of Cost of Goods Purchase (Net Purchase) :-
= Purchase - Purchase Return and Allownces - Purchase Discount
= $42900 - $1850 - $840
= $40210
3) Calculation of Cost of Goods Sold :-
= Beginning Inventory + Net Purchase - Ending Inventory
= $1100 + $40210 - $12000
= $29310
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