Use the data for Barkley Company in Problem 4-3B to complete the following requi
ID: 2343265 • Letter: U
Question
Use the data for Barkley Company in Problem 4-3B to complete the following requirements. Required 1. Prepare closing entries as of March 31, 2017 (the perpetual inventory system is used) Analysis Component 2. In prior years, the company experienced a 5% returns and allowance rate on its sales, which means n 4-4B g closing entries rpreting information (1) $55,175 Dr.to approximately 5% of its gross sales were eventually returned outright or caused the company to grant allowances to customers. Compute the ratio of sales returns and allowances divided by gross sales. How does this year's ratio compare to the 5% ratio in prior years? come Summary 2) Current-year 0%Explanation / Answer
net sales of the year
total cost of merchandise purchased
sales
332650
invoice cost
138500
less sales return and allowance
5875
less purchase discount
2950
less sales discount
20000
less purchase return and allowance
6700
net sales of the year
306775
add transportation in
5750
total cost of merchandise purchased
134600
Multi step income statement
SINGLE step income statement
sales
332650
TOTAL NET SALES
306775
less sales return and allowance
5875
LESS COST OF GOODS SOLD
115600
less sales discount
20000
GROSS PROFIT
191175
net sales of the year
306775
TOTAL OF EXPENSES
136000
less cost of goods sold
SALES SALARIES EXPENSE
44500
opening inventory
37500
RENT EXPENSE- SELLING EXPENSE
16000
total cost of merchandise purchased
134600
ADVERTISING EXPENSE
26000
less closing inventory
56500
STORE SUPPLIES EXPENSE
3850
cost of goods sold
115600
OFFICE SALARIES EXPENSE
40750
GROSS PROFIT
191175
RENT EXPENSE
3800
SELLING EXPENSES
OFFICE SUPPLIES EXPENSE
1100
SALES SALARIES EXPENSE
44500
NET INCOME
55175
RENT EXPENSE- SELLING EXPENSE
16000
ADVERTISING EXPENSE
26000
TOTAL SELLING EXPENSE
86500
LESS GENERAL AND ADMINISTRATIVE EXPENSE
STORE SUPPLIES EXPENSE
3850
OFFICE SALARIES EXPENSE
40750
RENT EXPENSE
3800
OFFICE SUPPLIES EXPENSE
1100
GENERAL AND ADMINISTRATIVE EXPENSE
49500
NET PROFIT
55175
net sales of the year
total cost of merchandise purchased
sales
332650
invoice cost
138500
less sales return and allowance
5875
less purchase discount
2950
less sales discount
20000
less purchase return and allowance
6700
net sales of the year
306775
add transportation in
5750
total cost of merchandise purchased
134600
Multi step income statement
SINGLE step income statement
sales
332650
TOTAL NET SALES
306775
less sales return and allowance
5875
LESS COST OF GOODS SOLD
115600
less sales discount
20000
GROSS PROFIT
191175
net sales of the year
306775
TOTAL OF EXPENSES
136000
less cost of goods sold
SALES SALARIES EXPENSE
44500
opening inventory
37500
RENT EXPENSE- SELLING EXPENSE
16000
total cost of merchandise purchased
134600
ADVERTISING EXPENSE
26000
less closing inventory
56500
STORE SUPPLIES EXPENSE
3850
cost of goods sold
115600
OFFICE SALARIES EXPENSE
40750
GROSS PROFIT
191175
RENT EXPENSE
3800
SELLING EXPENSES
OFFICE SUPPLIES EXPENSE
1100
SALES SALARIES EXPENSE
44500
NET INCOME
55175
RENT EXPENSE- SELLING EXPENSE
16000
ADVERTISING EXPENSE
26000
TOTAL SELLING EXPENSE
86500
LESS GENERAL AND ADMINISTRATIVE EXPENSE
STORE SUPPLIES EXPENSE
3850
OFFICE SALARIES EXPENSE
40750
RENT EXPENSE
3800
OFFICE SUPPLIES EXPENSE
1100
GENERAL AND ADMINISTRATIVE EXPENSE
49500
NET PROFIT
55175
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