ACG2021 Chapter Notes - Chapter 4: Merchandising, Gross Profit, Gross Margin
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Todrick Company is a merchandiser that reported the following information based on 1,000 units sold:
Sales | $ | 270,000 |
Beginning merchandise inventory | $ | 18,000 |
Purchases | $ | 180,000 |
Ending merchandise inventory | $ | 9,000 |
Fixed selling expense | $ | ? |
Fixed administrative expense | $ | 10,800 |
Variable selling expense | $ | 13,500 |
Variable administrative expense | $ | ? |
Contribution margin | $ | 54,000 |
Net operating income | $ | 16,200 |
2. Prepare a traditional format income statement.
|
The income statement of Vince Gill Company is shown below.
Vince Gill Company | ||
Income Statement | ||
For year ended December 31, 2014 | ||
Sales Revenue | $6,947,090 | |
Cost of Goods Sold | ||
Beginning inventory | $1,890,710 | |
Purchases | 4,323,810 | |
Goods available for sale | 6,214,520 | |
Ending inventory | 1,601,450 | |
Cost of goods sold | 4,613,070 | |
Gross Profit | 2,334,020 | |
Operating expenses | ||
Selling expenses | 446,970 | |
Admin expenses | 709,920 | 1,156,890 |
Net income | 1,177,130 | |
1. | Accounts receivable decreased $316,040 during the year. | |
2. | Prepaid expenses increased $175,400 during the year. | |
3. | Accounts payable to suppliers of merchandise decreased $283,580during the year. | |
4. | Accrued expenses payable decreased $115,830 during theyear. | |
5. | Administrative expenses include depreciation expense of$54,760. |
Prepare the operating activities section of the statement ofcash flows using the direct method.