ADJUSTED TRIAL BALANCE Gem City Music Adjusted Trial Balance December 31, 2018 D

Question

ADJUSTED TRIAL BALANCE Gem City Music Adjusted Trial Balance December 31, 2018 Debit Credit Cash Rent Expense Accounts Receivable Office Equipment Accumulated Depreciation Accounts Payable Depreciation Expense Common Stock Office Salaries Expense Retained Earnings Sales Sales Discounts Forfeited Cost of Goods Sold Insurance Expense Merchandise Inventory Salaries Payable Dividends Sales Salaries Expense $22,000 15,600 31,600 66,000 $18,400 37,600 5,600 17,000 45,100 6,000 381,200 2,000 206,400 5,600 19,200 2,500 5,600 35,400 2,600 4,000 Delivery Expense Interest Expense Total $464,700 $464.700 Assume that30% ofthe depreciation expense related to automobiles used- exclusively by the sales staff to make sales calls to customers. Also assume that 20% of the insurance expense is related to these same vehicles

Explanation / Answer

GEM CITY MUSIC

Multistep Income statement

for the period ended December 31 ,2018

GEM CITY MUSIC

Multistep Income statement

for the period ended December 31 ,2018

sales revenue 381200 less:cost of goods sold (206400) Gross margin 174800 less:selling and administrative expense selling expense Depreciation expense [5600*.30] 1680 Insurance expense [5600*.20] 1120 sales salaries expense 35400 Delivery expense 2600 (40800) Administrative expense Rent expense 15600 Depreciation expense [5600-1680] 3920 Office salaries expense 45100 Insurance expense [5600-1120] 4480 (69100) Income from operations 64900 other income / (expense) sales discount forfeited 2000 Interest expense (4000) Other income /(Expense) (2000) Income from continuing operations 62900

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