PLEASE COMPLET EXERCISES FROM CHATPER 6 OF THE TEXBOOK:

EX 6-1 During the current year, merchandise is sold for $ 775,000. The cost of merchandise sold is $426,250.

a. What is the amount of gross profit?

b. Compute the gross profit percentage (gross profit divided by sales)

c. Will the income statement necessarily report a net income? Explain

EX 6-2 Determining Cost of merchandise sold

For the year ended February 28, 2009, Best buy reported revenue of 45,015 million. Its gross profit was $10998 million. What was the amount of Best buy's cost of merchandise sold?

EX 6-4 Income Statement for merchandiser

The following expenses were incurred by a merchandising business during the year .In which expenses section of the income statement should each be reported: (a) Selling, (b) administrative, or (c) other?

1.Advertising expenses

2.Depreciation expense on store equipment

3.Insurance expense on office equipment

4.Interest expense on notes payables

5.Rent expenses on Office building

6.Salaries of office personnel

7.Salary of sales manager

8.Sales supplies used.

Balances of the accounts appearing in the

EX 6-5 Single step income statement

Summary operating data for heartland Company during the current year ended November 30, 2012 , are as follows : cost of merchandise sold , $2,500,00; administrative expenses, $300,000; interest expenses,$20,000; rent revenue, $95,000; net sales, 4,200,000; and selling expenses, $400,000. Prepare a single -step income statement.

EX 6-8 Multiple- step income statement

On December 31, 2012, the balances of the accounts appearing in the ledger of Warm place Furnishings Company, a Furniture wholesaler, are as follows:

Administrative Expenses

$ 250,000

Rhonda Sipes, Capital

$ 741,000

Building

1,025,000

Rhonda Sipes, Drawing

50,000

Cash

97,000

Salaries Payable

6,000

Cost of Merchandise

1,700,000

Sales

3,000,000

Interest Expense

30,000

Sales Discounts

40,000

Merchandise Inventory

260,000

Sales Returns and Allowances

160,000

Notes Payable

400,000

Selling Expenses

450,000

Office Supplies

20,000

Store Supplies

65,000

a. Prepare a multiple-step income statement for the year ended December 31, 2012.

b. Compare the major advantages and disadvantages of the multiple-step and single-step forms of income statements.