The following is a partial Adjusted Trial Balance for Alpha Company for the mont
ID: 2393438 • Letter: T
Question
The following is a partial Adjusted Trial Balance for Alpha Company for the month:
Alpha Company
Adjusted Trial Balance (partial)
January 31, 2016
Accounts
Debit
Credit
Inventory
$2,750
Sales
$10,000
Sales Discounts
200
Sales Returns & Allowances
1,200
Purchases
4,000
Purchases Discounts
150
Purchase Returns & Allowances
450
Freight In
50
Advertising Expense
150
Depreciation Expense (100% Admin & General)
130
Freight Out
70
Income Tax Expense
500
Salaries Expense
500
Utilities Expense
100
Additionally, Inventory for December 31, 2015 was $2,500. Prepare a multiple-step income statement.
What amount should Alpha Company report on a Multi-Step Income Statement for the following items:
1. Net Sales
2. Cost of Goods Available for Sales
3. Gross Profit
4. General & Administrative Expenses
5. Income before Taxes
Alpha Company
Adjusted Trial Balance (partial)
January 31, 2016
Accounts
Debit
Credit
Inventory
$2,750
Sales
$10,000
Sales Discounts
200
Sales Returns & Allowances
1,200
Purchases
4,000
Purchases Discounts
150
Purchase Returns & Allowances
450
Freight In
50
Advertising Expense
150
Depreciation Expense (100% Admin & General)
130
Freight Out
70
Income Tax Expense
500
Salaries Expense
500
Utilities Expense
100
Explanation / Answer
Al. Company
Multiple-step income statement
For the year ended 31/12/2015
Heads
Amount, $
Amount, $
Sales:
Gross sales
10,000
Sales returns
(1,200)
Sales discount
(200)
1.Net sales
8,600
Costs:
Gross purchase
4,000
Purchase discount
(150)
Purchase returns
(450)
Net purchase
3,400
Beginning inventory
2,750
Ending inventory
(2,500)
Freight in
50
2. Cost of goods sold
(3,700)
3. Gross profit
4,900
G & A expenses:
Salaries
500
Utilities
100
Advertising
150
Depreciation
130
Freight out
70
4. Total G & A expenses
(950)
5. Income before tax
3,950
Income tax
(500)
Net income
3,450
Note: Figures which are to be subtracted given in the brackets.
Heads
Amount, $
Amount, $
Sales:
Gross sales
10,000
Sales returns
(1,200)
Sales discount
(200)
1.Net sales
8,600
Costs:
Gross purchase
4,000
Purchase discount
(150)
Purchase returns
(450)
Net purchase
3,400
Beginning inventory
2,750
Ending inventory
(2,500)
Freight in
50
2. Cost of goods sold
(3,700)
3. Gross profit
4,900
G & A expenses:
Salaries
500
Utilities
100
Advertising
150
Depreciation
130
Freight out
70
4. Total G & A expenses
(950)
5. Income before tax
3,950
Income tax
(500)
Net income
3,450
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