Problem 5-4A Lambert Department Store is located in midtown Metropolis. During t

Question

Problem 5-4A Lambert Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company's fiscal year on November 30, 2014, these accounts appeared in its adjusted trial balance. Accounts Payable Accounts Receivable Accumulated Depreciation-Equipment Cash Common Stock Cost of Goods Sold Freight-Out Equipment Depreciation Expense Dividends Gain on Disposal of Plant Assets Income Tax Expense Insurance Expense Interest Expense Inventory Notes Payable Prepaid Insurance Advertising Expense Rent Expense Retained Earning:s Salaries and Wages Expense Sales Revenue Salaries and Wages Payable Sales Returns and Allowances Utilities Expense $36,716 23,564 93,160 10,960 47,950 841,591 8,494 215,090 18,495 16,440 2,740 13,700 12,330 6,850 35,894 59,595 8,220 45,895 46,580 19,454 160,290 1,238,480 8,220 27,400 14,522

Explanation / Answer

INCOME STATEMENT For the year ended November 30, 2014 A Sales Revenue $1,238,480 B Sales returns and allowances $27,400 C=A-B Net saless $1,211,080 D Cost of goods sold $841,591 E=C-D Gross Profit $369,489 Operating expenses: F Advertising expense $45,895 G Freight out $8,494 H Depreciation expenses $18,495 I Utilities expense $14,522 J Salaries & wages expense $160,290 K Rent expense $46,580 L Insurance expense $12,330 M=F+G+H+I+J+K+L Total Operating Expenses $306,606 N=E-M Income from operations $62,883 Other revenue and gains; P Gain on diposal of plant $2,740 Other expenses and losses Q Interest expense $6,850 R=N+P-Q Income before taxes $58,773 S Income tax expense $13,700 T=R-S Net Income/(Loss) $45,073 RETAINED EARNINGS STATEMENT For the year ended November 30, 2014 Retained Earning ,December 1, 2013 $19,454 Add:Net Income/(Loss) $45,073 Less: Dividends $16,440 Retained Earning ,November 30, 2014 $48,087 BALANCE SHEET As on November 30, 2014 Current Assets: Cash $10,960 Accounts Receivable $23,564 Inventory $35,894 Prepaid insurance $8,220 Total current assets $78,638 Property Plant and Equipment: Equipment $215,090 Less:Accumulated depreciation $93,160 $121,930 Total Assets $200,568 Current Liabilities: Acconts Payable $36,716 Salaries and wages payable $8,220 Total current liabilities $44,936 Long TermLiabilities: Notess payable $59,595 TotalLiabilities $104,531 Stockholder' Equity CommonStock $47,950 Retained Earnings $48,087 TotalStockholders' Equity $96,037 TotalLiabilities and stockholders'Equity $200,568 Profit Margin 0.03970588 (45073/1211080) Gross Profit Rate 0.3050905 (369489/1211080) Profit Margin(percentage) 3.97% Gross Profit Rate(Percentage) 30.51%

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.