Exercise 4-17A Comprehensive exercise with sales discounts LO 4-2, 4-3, 4-4, 4-6, 4-7, 4-8 Junker's Stash started the Year 2 accounting period with the balances given in the financial statements model shown below. During ear 2, Junker's Stash experienced the following business events: 1. Pald cash to purchase $92,000 of merchandise Inventory. 2. The goods that were purchased In Event 1 were delivered FOB destination. Freight costs of $1,840 were pald In cash by the responsible party. 3a. Sold merchandise for $105,000 under terms 1/10, n/30. 3b. Recognized $52,900 of cost of goods sold. 4a. Junker's Stash customers returned merchandise that was sold for $2,540. 4b. The merchandise returned in Event 4a had cost Junker's Stash $1,470. 5. The merchandise In Event 3a was sold to customers FOB destination. Freight costs of $1,870 were pald In cash by the responsible party 6a. The customers paid for the merchandise sold in Event 3a within the discount period. Recognized the sales discount. 6b. Collected the balance in the accounts receivable account. 7. Pald cash of $7,400 for selling and administrative expenses. 8. Sold the land for $10,200 cash. Required a. Record the above transactions in a financial statements model. The first event is recorded as an example. b. Determine the amount of net sales. c. Prepare a multistep Income statement. Include common size percentages on the Income statement. d. The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the Income statement, did the expenses for Junker's Stash Increase or decrease in Year 2? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Record the above transactions in a financial statements model. The first event is recorded as an example. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for Net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) Show less JUNKER'S STASH Financial Statements Model Balance Sheet Assets Stockholders' Equity + Inventory + Land - Common = . Retained Stock Earnings 17,200 + 15,400 = 92,000 + 42,600 + 92,000+ Revenue Gain Income Statement Expensel = Net Income Statement of Cash Flow Event Accounts No. Beg. bal. Cash + 102,000 + (92.000) (92,000)| OA + 105,000 + 105,000 105,000 (52.900) + (52.000) (52,900) 1.4701 + 1,470 1.470 (1.870) + (1.870) End. bal. 8,130 + 105,000 + 57,770 + 15,400 = 92,000+ 94,300 105,000 51,700 (92.000) NC Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Determine the amount of net sales. (Round your answer to 1 decimal place.) Net sales Required A Required B Required C Required D Prepare a multistep income statement. Include common size percentages on the income statement. (Round your answers to 1 decimal place.) JUNKER'S STASH Income Statement For the Year Ended December 31, Year 2 Operating expenses Total operating expenses 0.0 Non-operating items $ 0.0 0.0 % Required A Required B Required c Required D The return-on-sales ratio for Junker's Stash during the prior year was 12 percent. Based on the common size data in the income statement, did the expenses for Junker's Stash increase or decrease in Year 2? Did the expenses for Junker's Stash increase or decrease in Year 2
