Use the following adjusted trial balance and additional information to complete the requirements.

Supplementary records for the year reveal the following itemized costs for merchandising activities.

Required
1. Use the supplementary records to compute the total cost of merchandise purchases for the year.
2. Prepare a multiple-step income statement for the year. (Beginning inventory was $70,100.)
3. Prepare a single-step income statement for the year.
4. Prepare closing entries for KC Antiques at December 31.

5. Compute the acid-test ratio and the gross margin ratio. Explain the meaning of each ratio and interpret them for KC Antiques.

Transcribed Image Text:

December 31 Cash...... Accounts receivable... Merchandise inventory (ending) KC ANTIQUES Adjusted Trial Balance Store supplies Equipment ... Accumulated depreciation-Equipment Accounts payable.... Salaries payable Common stock.. Retained earnings Dividends. Sales.. Sales discounts... Sales returns and allowances Cost of goods sold. Depreciation expense-Store equipment Depreciation expense-Office equipment Sales salaries expense Office salaries expense Insurance expense. Rent expense-Selling space.. Rent expense-Office space Store supplies expense Advertising expense Totals... Debit $ 7,000 13,000 60,000 1,500 45,600 10,000 5,000 6,000 159,900 4,100 1,600 30,000 Credit $ 16,600 9,000 2,000 20,000 59,000 343,250 34,000 11,000 16,800 7,200 5,750 31,400 $449,850 $449,850