Prepare a profit and loss statement for a boutique with the following figures and determine if the store operated at a profit: Gross sales Customer returns Billed costs Inward freight Advertising Rent Alterations Salaries Miscellaneous expenses $104,000 5,000 49,000 10,000 7,500 12,000 1,000 16,000 5,000
Prepare a profit and loss statement for a boutique with the following figures and determine if the store operated at a profit: Gross sales Customer returns Billed costs Inward freight Advertising Rent Alterations Salaries Miscellaneous expenses $104,000 5,000 49,000 10,000 7,500 12,000 1,000 16,000 5,000
Related questions
| Unadjusted Trial Balance | ||
|---|---|---|
| Cash | 7,400 | |
| Merchandise inventory | 24,000 | |
| Store supplies | 9,700 | |
| Prepaid insurance | 6,600 | |
| Store equipment | 81,800 | |
| Accumulated depreciation-Store Equipment | 32,000 | |
| Accounts payable | 18,000 | |
| Common Stock | 3,000 | |
| Retained earnings | 40,000 | |
| Dividends | 2,000 | |
| Sales | 227,100 | |
| Sales Discounts | 1,000 | |
| Sales returns and allowances | 5,000 | |
| Cost of goods sold | 75,800 | |
| Depreciation expense-Store equipment | 0 | |
| Salariers expense | 63,000 | |
Insurance expense | 0 | |
| Rent Expense | 26,000 | |
| Store supplies expense | 0 | |
| Advertising expense | 17,800 | |
| Totals | 320,100 | 320,100 |
1. Prepare adjusted journal entries to reflect each of thefollowing.
a. Store supplies still available at fiscal year-end amount to3,700.
b. Expired insurance, an administrative expense, for th fiscalyear is 2,800
c. Depreciation expense on store equipment, a selling expense,is 3,000 for a fiscal year.
d. To estimate shrinkage, a physical count of ending merchandiseinventory is taken. It shows 21,300 of inventory is still availableat fiscal year end.
2. Prepare a multiple step indome statement for fiscal year2013. Check in book says Gross profit should be142,600
3. Prepare a single- step income statement of fiscal year 2013.Check in book Says Total expenses, 197,100 and Net Income,24,000
4. Compute the current ratio, acid- test ratio, and gross marginratio as of October 31, 2013.
Overview: Classifying a companyâs costs allows for an in-depthanalysis of the impact that changes in output have on revenues,costs, and net income or net loss. A cost-volume-profit (CVP)analysis will be completed in order to determine the breakevenpoint. Relevant costs will be used to prepare a flexible budget.Additionally, an appropriate costing system should be selected andthe choice should be substantiated with reasonable rationale.Finally, a memo should be prepared for management that summarizesthe results of the quantitative analysis and makes recommendationsfor an optimal costing system to be ethically used by key decisionmakers. For Milestone One, you will use the MDE ManufacturingBudget (Table I) to analyze costs, contribution margin, andbreakeven point for the bird feeder division of the company. In Tab1 of your Student Workbook, classify costs as either product orperiod costs. Briefly explain the difference between the types ofcosts. Then, analyze the actual costs and, using Tab 2 of yourStudent Workbook, complete a cost-volume-profit analysis todetermine how many bird feeders must be sold at the current costand sales price level to earn a 10% profit and how much the salesprice would have to increase to earn a 10% profit at the same costand sales volume level. Submit the Student Workbook with Tabs 1 and2 completed with your cost calculations and a 1â2 page Worddocument that explains the implications of your findings andaddresses all of the critical elements in Section I.
I. Salesand Manufacturing Expenses: Budget and Actual (2014)
You will use this table to complete Milestones One and Two.
Budget ($) | Actual ($) | |
Sales | 1,050,000 | 991,700 |
Expenses | ||
Materials â Cedar | 225,000 | 248,160 |
Materials â Plastic | 37,500 | 37,741 |
Factory Worker Labor | 300,000 | 332,760 |
Materials â Indirect | 3,000 | 2,585 |
Factory Depreciation | 78,000 | 78,000 |
Factory Utilities | 12,000 | 12,000 |
Factory Maintenance and Repairs | 5,000 | 4,500 |
Shipping ($2.25/each) | 112,500 | 105,750 |
Sales Commissions ($2.00/unitsold) | 100,000 | 94,000 |
Office Rent | 12,000 | 12,000 |
Advertising | 20,000 | 20,000 |
Liability insurance | 5,000 | 5,000 |
Office Depreciation | 1,000 | 1,000 |
Office Salaries | 48,000 | 48,000 |
Total Expenses | 959,000 | 1,001,496 |
II. Contribution Margin: Static Budget and Actual Results (2014)
You will use this table to complete Milestone Two.
Actual Results | Static Budget Amount | |
Units Sold | 47,000 | 50,000 |
Revenues ($) | 991,700 | 1,050,000 |
Manufacturing Costs ($) | ||
Variable | 621,246 | 565,500 |
Fixed | 94,500 | 95,000 |
Gross Margin | 275,954 | 389,500 |
| Milestone One,Part I | ||
| Product Costs | ||
| Period Costs | ||
| Totals | Totals | ||||||||||
| Budget | Actual | ||||||||||
| Sales Price per Unit | |||||||||||
| Variable Costs | |||||||||||
| Materials - Cedar | |||||||||||
| Materials - Plastic | |||||||||||
| Factory Worker Labor | |||||||||||
| Materials - Indirect | |||||||||||
| Shipping ($2.25/ea) | |||||||||||
| Sales Commissions ($2/unit sold) | |||||||||||
| Variable Cost per Unit | |||||||||||
| Contribution Margin | |||||||||||
| Fixed Costs | |||||||||||
| Factory Depreciation | |||||||||||
| Factory Utilities | |||||||||||
| Factory Maintenance and Repairs | |||||||||||
| Office Rent | |||||||||||
| Advertising | |||||||||||
| Liability Insurance | |||||||||||
| Office Depreciation | |||||||||||
| Office Salaries | |||||||||||
| Total Fixed Costs | |||||||||||
| Using Budgeted Amounts | |||||||||||
| Breakeven Point - | Breakeven Point - | ||||||||||
| Using Actual Amounts | Units at Current Sales Price | ||||||||||
| + 10,000 profit | |||||||||||
| Using actual amounts | New Contribution Margin | ||||||||||
| + 10,000 profit | Current Variable Costs | ||||||||||
| New Sales Price | |||||||||||
he following are selected ledger accounts of Spock Corporationat December 31, 2014.
| Cash | $188,640 | Salaries and wages expense (sales) | $287,640 | |||
| Inventory | 538,640 | Salaries and wages expense (office) | 349,640 | |||
| Sales revenue | 4,278,640 | Purchase returns | 18,640 | |||
| Unearned sales revenue | 120,640 | Sales returns and allowances | 82,640 | |||
| Purchases | 2,789,640 | Freight-in | 75,640 | |||
| Sales discounts | 37,640 | Accounts receivable | 146,140 | |||
| Purchase discounts | 30,640 | Sales commissions | 86,640 | |||
| Selling expenses | 72,640 | Telephone and Internet expense (sales) | 20,640 | |||
| Accounting and legal services | 36,640 | Utilities expense (office) | 35,640 | |||
| Insurance expense (office) | 27,640 | Miscellaneous office expenses | 11,640 | |||
| Advertising expense | 57,640 | Rent revenue | 243,640 | |||
| Delivery expense | 96,640 | Extraordinary loss (before tax) | 73,640 | |||
| Depreciation expense (office equipment) | 51,640 | Interest expense | 179,640 | |||
| Depreciation expense (sales equipment) | 39,640 | Common stock ($10 par) | 903,640 |
Spockâs effective tax rate on all items is 30%. A physicalinventory indicates that the ending inventory is $689,640.
Prepare a condensed 2014 income statement for Spock Corporation.(Round earnings per share to 2 decimal places, e.g.1.48.)
