Q1. Explain the inventory system followed by merchandiser (3 marks).

Q2.Assume that Guardian Company uses a periodic inventory system and has these account balances: Purchases $600,000; Purchase Returns and Allowances $25,000; Purchase Discounts $11,000; and Freight-in $19,000; beginning inventory of $45,000; ending inventory of $55,000; and net sales of $750,000. ( 3 marks)

Required: Determine the cost of goods sold.

Q3. Deloy Company gathered the following condensed data for the year ended December 31, 2016 (4 marks)

Cost of goods sold $ 690,000

Net sales 1,250,000

Administrative expenses 234,000

Interest expense 58,000

Dividend revenue 38,000

Loss from employee strike 233,000

Selling expenses 45,000

You are required to prepare multi step income statement for the year ended December 31, 2016.

Assignment 2 ACCT 101 (Total Marks 10) Deadline for submitting by students is end of week 6 Q1. Explain the inventory system followed by merchandiser (3 marks). Answer: Q2.Assume that Guardian Company uses a periodic inventory system and has these account balances: Purchases $600,000; Purchase Returns and Allowances $25,000; Purchase Discounts $11,000; and Freight-in $19,000; beginning inventory of $45,000; ending inventory of $55,000; and net sales of $750,000. ( 3 marks) Required: Determine the cost of goods sold. Answer: 1 3. Deloy Company gathered the following condensed data for the year ended December 31, 2016 (4 marks) Cost of goods sold $ 690,000 Net sales 1,250,000 Administrative expenses 234,000 Interest expense 58,000 Dividend revenue 38,000 Loss from employee strike 233,000 Selling expenses 45,000 You are required to prepare multi step income statement for the year ended December 31, 2016. Answer: 2