ECON 25 Study Guide - Final Guide: Free Cash Flow, Debits And Credits, Current Liability
Get access
Related Documents
Related Questions
CP6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and Computing the Gross Profit Percentage [LO 6-5]
[The following information applies to the questions displayed below.] |
Psymon Company, Inc. sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31: |
Account Titles |
Debits |
Credits |
||||
Cash |
$ |
59,810 |
||||
Accounts Receivable |
24,800 |
|||||
Inventory |
90,500 |
|||||
Property and Equipment |
67,000 |
|||||
Accumulated Depreciation |
$ |
28,100 |
||||
Liabilities |
41,900 |
|||||
Common Stock |
124,000 |
|||||
Retained Earnings, January 1 |
15,000 |
|||||
Sales Revenue |
258,500 |
|||||
Sales Returns and Allowances |
8,700 |
|||||
Sales Discounts |
11,400 |
|||||
Cost of Goods Sold |
138,800 |
|||||
Salaries and Wages Expense |
23,800 |
|||||
Office Expense |
24,800 |
|||||
Interest Expenses |
3,700 |
|||||
Income Tax Expense |
14,190 |
|||||
Totals |
$ |
467,500 |
$ |
467,500 |
||
Required: |
1. |
Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement. |
2. |
Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales. |