C. 1. Complete the Adjustments section of the work sheet using the following information: a. On October 30, an inventory of the supplies showed that items costing $1,730 were used this month. Record an adjustment for the supplies used in October. b. On October 1, 20xx the company purchased a twelve-month insurance policy for $8,400. Record an adjustment for the expired insurance during the month of October. On October 3, the company purchased a six-month advertising contract for $4,800. Record an adjustment for the expired advertising in October. Assume a full month of advertising expired in October. d. The company owns store equipment and purchased it for $83,000. The store equipment has an estimated useful life of 8 years and a salvage value of $8,000. Record depreciation on the store equipment for one month using the 200% declining balance method. e-f. Based on a physical count, ending merchandise inventory was determined to be $21,500. g. Record the estimate for uncollectible accounts using the percent of credit sales method at 2% of credit (on account) sales Horizontal Analysis Express Fashion Comparative Income Statement For the Months Ended October 31, 2019 and October 31, 2020 Dollar Dollar Change Percent Change Oct-19 Oct-20 S Sales Revenue: Sales Sales Returns & Allowances Sales Discounts 44,890.00 (1,030.00) $ 43,860.00 $ 18,410.00 11,860.00 (415.00) (205.00) 11,240.00 330.00 Vertical Analysis Express Fashion Income Statement For the Months Ended October 31, 2019 and October 31, 2020 Oct-20 Oct-19 Oct-19 Dollar Percentag Oct-20 Amount Amount e Percentage Sales Revenue: : Sales $ 44,890.00 L 100% 100% Sales Returns & Allowances (1,030.00) Sales Discounts Net Sales $ 43,860.00 $ Cost of Goods Sold: Beginning Inventory 18,410.00 Purchases 11,860.00 Purchases Returns & Allowance (415.00) Purchases Discounts (205.00) Net Purchases 11,240.00 Freight in 330.00 Delivered Cost of Purchases 11,570.00 Cost of Goods Available for Sale 29,980.00 Ending Inventory 23,235.00 Cost of Goods Sold $ 6,745.00 $ Gross Profit $ 37,115.00 5 Operating Expenses: Rent Expense 7,200.00 L Advertising Expense 1,500.00 Depreciation Exp.-Store Equip 940.00 Depreciation Exp.-Office Equip 315.00 L Janitorial Services Expense 880.00! Wages Expense 4,620.00 Phone Expense 415.00 Utilities Expense 1,525.00 Bad Debt Expense 145.00 Supplies Expense 880.00 Insurance Expense 100.00 L Total Operating Expense: $ 18,520.00 $ Net Income $ 18,595.00 $ 11,570.00 29,980.00 23,235.00 6,745.00 37,115.00 S $ $ Net Sales Cost of Goods Sold: Beginning Inventory Purchases Purchases Returns & Allowances Purchases Discounts Net Purchases Freight In Delivered Cost of Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses: Rent Expense Advertising Expense Depreciation Exp.-Store Equip Depreciation Exp.-Office Equip Janitorial Services Expense Wages Expense Phone Expense Utilities Expense Bad Debt Expense Supplies Expense Insurance Expense Total Operating Expenses Net Income S 7,200.00 1,500.00 940.00 F L 315.00 880.00 4,620.00 L 415.00 1,525.00 145.00 880.00 100.00 $ $ 18,520.00 18,595.00 $ $ C. 1. Complete the Adjustments section of the work sheet using the following information: a. On October 30, an inventory of the supplies showed that items costing $1,730 were used this month. Record an adjustment for the supplies used in October. b. On October 1, 20xx the company purchased a twelve-month insurance policy for $8,400. Record an adjustment for the expired insurance during the month of October. On October 3, the company purchased a six-month advertising contract for $4,800. Record an adjustment for the expired advertising in October. Assume a full month of advertising expired in October. d. The company owns store equipment and purchased it for $83,000. The store equipment has an estimated useful life of 8 years and a salvage value of $8,000. Record depreciation on the store equipment for one month using the 200% declining balance method. e-f. Based on a physical count, ending merchandise inventory was determined to be $21,500. g. Record the estimate for uncollectible accounts using the percent of credit sales method at 2% of credit (on account) sales Horizontal Analysis Express Fashion Comparative Income Statement For the Months Ended October 31, 2019 and October 31, 2020 Dollar Dollar Change Percent Change Oct-19 Oct-20 S Sales Revenue: Sales Sales Returns & Allowances Sales Discounts 44,890.00 (1,030.00) $ 43,860.00 $ 18,410.00 11,860.00 (415.00) (205.00) 11,240.00 330.00 Vertical Analysis Express Fashion Income Statement For the Months Ended October 31, 2019 and October 31, 2020 Oct-20 Oct-19 Oct-19 Dollar Percentag Oct-20 Amount Amount e Percentage Sales Revenue: : Sales $ 44,890.00 L 100% 100% Sales Returns & Allowances (1,030.00) Sales Discounts Net Sales $ 43,860.00 $ Cost of Goods Sold: Beginning Inventory 18,410.00 Purchases 11,860.00 Purchases Returns & Allowance (415.00) Purchases Discounts (205.00) Net Purchases 11,240.00 Freight in 330.00 Delivered Cost of Purchases 11,570.00 Cost of Goods Available for Sale 29,980.00 Ending Inventory 23,235.00 Cost of Goods Sold $ 6,745.00 $ Gross Profit $ 37,115.00 5 Operating Expenses: Rent Expense 7,200.00 L Advertising Expense 1,500.00 Depreciation Exp.-Store Equip 940.00 Depreciation Exp.-Office Equip 315.00 L Janitorial Services Expense 880.00! Wages Expense 4,620.00 Phone Expense 415.00 Utilities Expense 1,525.00 Bad Debt Expense 145.00 Supplies Expense 880.00 Insurance Expense 100.00 L Total Operating Expense: $ 18,520.00 $ Net Income $ 18,595.00 $ 11,570.00 29,980.00 23,235.00 6,745.00 37,115.00 S $ $ Net Sales Cost of Goods Sold: Beginning Inventory Purchases Purchases Returns & Allowances Purchases Discounts Net Purchases Freight In Delivered Cost of Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses: Rent Expense Advertising Expense Depreciation Exp.-Store Equip Depreciation Exp.-Office Equip Janitorial Services Expense Wages Expense Phone Expense Utilities Expense Bad Debt Expense Supplies Expense Insurance Expense Total Operating Expenses Net Income S 7,200.00 1,500.00 940.00 F L 315.00 880.00 4,620.00 L 415.00 1,525.00 145.00 880.00 100.00 $ $ 18,520.00 18,595.00 $ $