Question text

XYZ Products, Selected Accounts from the Adjusted Trial Balance dated December 31, 2018 (for its year ended December 31, 2018).

Sales $385,000

Sales returns 12,000

Inventory 32,692

Purchase discounts 2,000

Purchase returns 5,000

Transportation-in 2,346

Josh Mayer, capital 16,270 CR

Sales discounts 7,400

Depreciation expense 10,000

Purchase allowances 4,000

Sales allowances 3,000

Purchases 218,000

Property tax expense 14,625

Store supplies expense 3,814

Wages expense 66,601

REQUIRED (NOTE THAT ALL ACCOUNTS HAVE THEIR NORMAL DEBIT OR CREDIT BALANCES):

The inventory on hand at December 31, 2018 was $24,388.

Part A. Using the PERIODIC SYSTEM, prepare ONLY the part of a classified, multiple-step Income Statement that includes the SALES, COST OF GOOD SOLD, and GROSS PROFIT sections (12 marks)

Part B. Calculate the gross margin % (also known as the gross profit %) (2 marks).

Part C. Prepare the first closing entry under the PERIODIC SYSTEM that closes the temporary accounts with credit balances and sets up ending inventory (5 marks) - NEED A DATE, but NO EXPLANATION REQUIRED

Part D. Prepare the second closing entry under the PERIODIC SYSTEM that closes the temporary accounts with debit balances and removes beginning inventory (7 marks) - NEED A DATE, but NO EXPLANATION REQUIRED

Part E. What is the net income for the year? (2 marks) - USE THE CLOSING ENTRIES TO CALCULATE THIS AMOUNT