Question
Smith Engineering uses the periodic inventory systemand has a December 31st year-end. The company began the year with inventory with a cost of $17,500. When
Smith Engineering uses the periodic inventory systemand has a December 31st year-end. The company began the year with inventory with a cost of $17,500. When Smith's staff counted inventory at December 31, inventory with a cost of $22,500 were on hand. The company also had the following account balances for the year (random order, all with normal balances):
Office Supplies Expense$4,700
Purchases235,000
Sales Discounts2,400
Advertising Expense9,800
Interest Income2,000
Freight In15,800
Freight Out12,200
Salesperson Salaries61,500
Sales Returns and Allowances10,200
Loss on Sale of PP&E550
Purchase Returns and Allowances9,800
Sales Revenue400,000
Purchase Discounts1,800
Management Salaries20,000
Multi-Step Income Statement(to the Gross Margin line only) for the year-ended December 31, 2020
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