Exercise 1: Beginning inventory $ 100,000 Purchases, net 800,000 Ending inventory 125,000 Instructions: Determine the cost of goods sold.

Exercise 2: Prepare the journal entries to record the transaction (purchase transactions) Feb . 5 purchased merchandise from Best Company for $5,000 Feb .10 purchased equipment on account for $6,000. Feb . 12 paid freight costs of $600 on merchandise purchased from Best company Feb . 15 returned damaged merchandise to Best Company and was granted a $400 credit for returned merchandise Feb .20 paid the amount due to Best Company in full.

Exercise 3: Prepare the journal entries to record the transaction in Best company. ( sales transactions ) Jan 1. Best Company sold $400,000 of merchandise to Harris Co. The cost of the merchandise sold was $250,000. Jan 15. Best Company received the balance due from Harris Co

Exercise 4: SINGLE STEP INCOME STATEMENT Cost of goods sold 242000, Net sales ( revenues ) 450000 Interest revenue 12000, gain on sale of equipments 2000 Advertising expenses 89000, General expenses 20000, salaries and wage expenses 250000, interest expenses 3500 Instructions Prepare a Singlestep income statement

Exercise 5: Prepare the sales revenue section of the income statement of SW company based on the following information Sales revenue $ 380000, sales discount $5000, sales returns and allowances $11000