The following information was taken from the accounts of Green Market, a delicat
ID: 2549765 • Letter: T
Question
The following information was taken from the accounts of Green Market, a delicatessen, at December 31, 2018. The accounts a in alphabetical order, and each has a normal balance. 145 Accounts payable Accounts receivable Advertising expense Cash Common stock Cost of goods sold Interest expense Merchandise inventory Prepaid rent Retained earnings, 1/1/2018 Sales revenue Salaries expense Rent expense Gain on sale of land 681 401 200 411 281 600 69 440 41 636 1,010 140 100 46 Required Prepare an income statement for the year using the single-step and multistep approach Complete this question by entering your answers in the tabs below. Single step Multistep Prepare an income statement for the year using the single-step approach GREEN MARKET Single Step Income Statement For the Year Ended December 31, 2018 Expenses Total cost and expensesExplanation / Answer
Single step statement Sales revenue 1010 Expense Cost of goods sold 600 Advertising expense 200 Interest expense 69 Salaries expense 140 Rent expense 100 Gain on sale of land -46 Total cost and expense 1063 Net income -53 Multiple step statement Sales revenue 1010 Cost of goods sold 600 Gross profit 410 Operating expense Advertising expense 200 Interest expense 69 Salaries expense 140 Rent expense 100 Gain on sale of land -46 Total operating expense 463 Net income -53 2 As inventory is returned so that means asset is reducing and accounts payable being liability is decreasing Asset and liabilities are reduced by 2500 3 Merchanise sold for cash 20200 Cash paid to supplier 10080 (13100-2600)*96% Net cash flow from operating activities 10120 4 Inventory purchased on account , So inventory being asset will increase and accounts payable being liabilities will increase So correct answer is C as there is no cash flow
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