B D E 1 1) The following account titles and balances were taken from the adjusted trial balance of King Co. for Year 2. The company uses the periodic inventory syste 2 3 4 8 9 11 Account Title Balance Sales returns and allowances 5,000 5 Miscellaneous expense 10,000 6 Transportation-out 7,000 7 Sales 800,000 Advertising expense 2000 Salaries expense 200,000 10 Transportation in 5,000 Purchases 300,000 12 Interest expense 2,000 13 Merchandise Inventory, January 1 202,000 Rent expense 4,000 15 Merchandise inventory, December 31 40,000 Purchase returns and allowances 12,000 17 Loss on sale of land 4,000 18 Utilities expense 10,000 19 Required 20 a. Prepare a schedule to determine the amount of cost of goods sold. (Amounts to be deducted should be indicated with minus sign.) 21 b. Prepare a multistep income statement. 14 16 4 a. Prepare a schedule to determine the amount of cost of goods sold 25 KING CO. 26 Schedule of Cost of Goods Sold 27 For the Year Ended December 31, Year 2 28 Beginning merchandise inventory 29 Purchases Purchase returns and allowances Transportation-in Cost of goods available for sale 33 Less: Ending merchandise inventory 54 Cost of goods sold ON D1 B B 36 b. Prepare a multistep income statement. 37 KING CO. 38 Income Statement 39 For the Year Ended December 31, Year 2 40 Sales 41 Sales revenue 42 Sales returns and allowances 43 Net sales 44 Cost of goods sold 45 Gross margin 46 Operating expenses 47 Miscellaneous expense 48 Transportation-out 49 Advertising expense 50 Salaries expense 51 Rent expense 52 Utilities expense 53 Total operating expense 54 Operating income 55 Non-operating items 56 Interest expense B C A B 60 61 c. Prepare a single-step income statement 62 KING CO. 63 Income Statement 64 For the Year Ended December 31, Year 2 65 Sales revenue 66 Sales returns and allowances 67 Net sales 68 Operating expenses 69 Cost of goods sold 70 Miscellaneous expense 71 Transportation-out 72 Advertising expense 73 Salaries expense 74 Rent expense 75 Utilities expense 76 Total operating expenses Non-operating items 78 Interest expense 79 Loss on sale of land 80 Net income PROFIT 81 82 77 $ Sheet1 SHEET 3 Sheetz SHEET 4 Sheet3 + Scroll lock