Use the following information (in random order) from a merchandising company and from a service company. McNeil Merchandising Company Accumulated depreciation $ 700 Beginning inventory 9,000 Ending inventory 5,400 Expenses 1,850 Net purchases 10,300 Net sales 17,500 Krug Service Company Expenses $ 9,600 Revenues 22,000 Cash 700 Prepaid rent 540 Accounts payable 200 Equipment 1,900 a. Compute the goods available for sale, the cost of goods sold and gross profit for the merchandiser. Hint. Not all information may be necessary. b. Compute net income for each company. QS 4-4 (Algo) Computing net invoice amounts LO P1 Compute the amount to be paid for each of the four separate invoices assuming that all invoices are paid within the discount period. Terms Payment Merchandise (gross) a. $ 9,000 b. $ 26,000 C. $ 83,000 d. $ 20,000 2/10, n/60 1/15, EOM 1/10, n/30 3/15, n/45 Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Nov. 5 Purchased 1,200 units of product at a cost of $10 per unit. Terms of the sale are 4/10, n/60; the invoice is dated November 5. Nov. 7 Returned 35 defective units from the November purchase and received full credit. Nov. 15 Paid the amount due from the November 5 purchase, minus the return on November 7. Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system. Sept. 15 Purchased merchandise with an invoice price of $70,000 and credit terms of 4/5, n/15. Sept. 29 Paid supplier the amount owed on the September 15 purchase. Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Apr. 1 Sold merchandise for $6,400, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $3,840. Apr. 4 The customer in the April 1 sale returned $720 of merchandise for full credit. The merchandise, which had cost $432, is returned to inventory. Apr. 8 Sold merchandise for $2,700, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $1,890. Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4. View transaction list Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Apr. 1 Sold merchandise for $6,400, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $3,840. Apr. 4 The customer in the April 1 sale returned $720 of merchandise for full credit. The merchandise, which had cost $432, is returned to inventory. Apr. 8 Sold merchandise for $2,700, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $1,890. Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4. View transaction list ! Required information Use the following information for Quick Studies below. (Algo) [The following information applies to the questions displayed below.) Vitamix reports the following information for its year ended December 31: Cash sales Sales on credit General and administrative expenses Sales returns Cost of goods sold Sales discounts Selling expenses $ 70,000 $100,000 $ 22,000 $ 12,000 $ 82,500 $ 3,000 $ 34,000 QS 4-16 (Algo) Preparing gross profit section of a multiple-step income statement LO P4 Use the above information to prepare the gross profit section of a multiple-step income statement. Save-the-Earth Co. reports the following income statement accounts for the year ended December 31. Sales discounts Office salaries expense Rent expense-office space Advertising expense Sales returns and allowances office supplies expense Cost of goods sold Sales Insurance expense Sales staff salaries $ 880 3,300 2,800 760 380 760 11,600 46,000 2,300 3,800 Prepare a multiple-step income statement for the year ended December 31. Sales Sales discounts Sales returns and allowances Cost of goods sold Carrier Lennox Trane York $ 159,000 $ 730,000 $ 47,000 $ 266,000 3,000 16,500 600 4,300 17,000 6,000 4,800 1,200 93,269 438,650 32,448 130,771 (a) Compute net sales, gross profit, and the gross margin ratio for each of the four separate companies. (b) Which company has the better gross margin ratio? Sales Sales discounts Sales returns and allowances Cost of goods sold Carrier Lennox Trane York $ 159,000 $ 730,000 $ 47,000 $ 266,000 3,000 16,500 600 4,300 17,000 6,000 4,800 1,200 93,269 438,650 32,448 130,771 (a) Compute net sales, gross profit, and the gross margin ratio for each of the four separate companies. (b) Which company has the better gross margin ratio? Fill in the blanks in the following separate income statements a through e. a b d e Sales $ 66,000 $ 43,600 $ 53,000 $ 27,000 8,000 16,660 5,400 7,200 4,500 35,000 6,600 28,000 7,600 2,900 8,300 Cost of goods sold Merchandise inventory beginning Total cost of merchandise purchases Merchandise inventory ending Cost of goods sold Gross profit Expenses Net income (loss) 33,860 18,000 7,800 12,850 41,100 4,600 19,000 12,200 7,300 10,800 $ 14,800 650 $ 36,500 The operating cycle of a merchandiser with credit sales includes the following five activities. With merchandise acquisition as the starting point, arrange the events in the correct order. a. Prepare merchandise for sale. b. Collect cash from customers on account. C. Make credit sales to customers. d. Purchase merchandise. e. Monitor and service accounts receivable