At the end of Donaldson Department Store\'s fiscal year on November 30, 2017, th

Question

At the end of Donaldson Department Store's fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance. Freight-in Inventory Purchases Purchase Discounts Purchase Returns and Allowances Sales Revenue Sales Returns and Allowances $7,500 40,700 570,300 6,000 2,600 1,103,800 18,200 Additional facts: 1. Merchandise inventory on November 30, 2017, is $53,600 2. Donaldson Department Store uses a periodic system. Prepare an income statement through gross profit for the year ended November 30, 2017.

Explanation / Answer

Prepare income statement :

Sales revenue 1103800 Less; Sales returns and allowances -18200 Net Sales 1085600 Cost of goods sold Beginning inventory 40700 Purchases 570300 Less; Purchase discount -6000 Less: Purchase return and allowance -2600 Net purchase 561700 Add: Freight in 7500 Cost of purchase 569200 Cost of goods available for sale 609900 Less; Ending inventory -53600 Cost of goods sold -556300 Gross profit 529300

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