Essay #1

From the adjusted trial balance (as of December 31, 2016) for RRSquare, Inc. (shown below), compute Net Sales, Gross Profit, Operating Profit (Income) and Net Income. You will input your answers in the four questions that follow this question. Also, you will compute four ratios from the trial balance information. See the separate questions below. Adjusted Trial Balance December 31 Debit Credit Cash $ 9,400 Accounts receivable 25,000 Merchandise inventory 36,000 Office supplies 900 Store equipment 75.000 Accumulated depreciation-store equipment $ 22,000 Office equipment 60,000 Accumulated depreciation office equipment 15,000 Accounts payable 42,000 Notes payable 10,000 Common stock 20,000 w Retained earnings 90,700 Dividends 48,000 Sales 325,000 Sales discounts 6,000 Sales returns and allowances 16,500 Cost of goods sold 195.000 Selling expenses 32,500 General and administrative expenses 19.800 Interest expense 600 Totals $324,700 S524.700 December 31 Cash Accounts receivable Merchandise inventory Office supplies Store equipment Accumulated depreciation-store equipment Office equipment Accumulated depreciation office equipment Accounts payable Notes payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Selling expenses General and administrative expenses Interest expense Totals Debit Credit 9.400 25.000 36,000 900 75.000 $ 22,000 60,000 15,000 42,000 10,000 20,000 90,700 48,000 325,000 6,000 16,500 195.000 32,500 19,800 600 S524 700 5524 700 Notes Payable are due two years from December 31, 2016 D Question 4 3.78 pts Compute the amount of Net Sales Question 5 3.78 pts Compute the amount of Gross Profit D Question 6 3.78 pts Compute the amount of Operating Profit (also known as "income from operations" or "operating income") Compute the amount of Net Income Question 8 3.78 pts Using the trial balance above, please compute the Gross Margin Ratio (two decimal places): (Hint: use Net Sales in your ratio) Question 9 3.78 pts Using the trial balance above, please compute the Day's Sales in Inventory (two decimal places): (Hint: use Cost of Goods Sold in your ratio) D Question 10 3.78 pts Using the trial balance above, please compute the Day's Sales Uncollected (two decimal places): (Hint: use Net Sales in your ratio) Question 11 3.78 pts Using the trial balance above, please compute the Current Ratio (two decimal places): (Hint: Current Assets/Current Liabilities)