1. From the adjusted trial balance for Worker Products Company given below, prepare a multiple-step income statement in good form.
Worker Products Company
Adjusted Trial Balance
December 31
DebitCredit
Cash $9,400
Accounts receivable25,000
Merchandise inventory 36,000
Office supplies 900
Store equipment 75,000
Accumulated depreciation – store equipment $22,000
Office equipment 60,000
Accumulated depreciation -office equipment 15,000
Accounts payable 42,000
Notes payable 10,000
F. Worker, Capital 110,700
F. Worker, Withdrawals 48,000
Sales 325,000
Sales discounts 6,000
Sales returns and allowances 16,500
Cost of goods sold 195,000
Sales salaries expense 32,500
Depreciation expense – store equipment 11,000
Depreciation expense – office equipment 7,500
Office supplies expense 1,300
Interest expense 600
Totals $524,700 $524,700
2. From the adjusted trial balance for Worker Products Company given below, prepare the necessary closing entries.
Worker Products Company
Adjusted Trial Balance
December 31
Debit Credit
Cash$ 9,400
Accounts receivable 25,000
Merchandise inventory 36,000
Office supplies 900
Store equipment 75,000
Accumulated depreciation – store equipment $22,000
Office equipment 60,000
Accumulated depreciation -office equipment 15,000
Accounts payable 42,000
Notes payable 10,000
F. Worker, Capital 110,700
F. Worker, Withdrawals 48,000
Sales 325,000
Sales discounts 6,000
Sales returns and allowances 16,500
Cost of goods sold 195,000
Sales salaries expense 32,500
Depreciation expense – store equipment 11,000
Depreciation expense – office equipment 7,500
Office supplies expense 1,300
Interest expense 600
Totals $524,700 $524,700
3. A company made the following merchandise purchases and sales during the month of May:
May 1 Purchased 380 units at$15 each
May 5 Purchased 270 units at$17 each
May 10 Sold400 units at $50 each
May 20 Purchased 300 units at $22 each
May 25 Sold 400 units at $50 each
There was no beginning inventory. If the company uses the LIFO periodic inventory method, what would be the cost of the ending inventory?
4. A company made the following merchandise purchases and sales during the month of May:
May 1 Purchased 380 units at $15 each
May 5 Purchased 270 units at $17 each
May 10 Sold 400 units at $50 each
May 20 Purchased 300 units at $22 each
May 25 Sold 400 units at $50 each
There was no beginning inventory. If the company uses the FIFO periodic inventory method, what would be the cost of the ending inventory?
5. Flaxco purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000, credit terms are 2/10, n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Flaxco paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions. Compute the cost that should be assigned to the inventory.
A. $50,000
B. $53,000
C. $52,000
D. $51,500
E. $53,200
6. A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?
A. $470
B. $490
C. $450
D. $570
E. $520
7. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.
Date Activities Units Acquired at Cost Units Sold at Retail
May 1 Beginning Inventory150 units @ $10.00
5 Purchase220 units @ $12.00
10 Sales140 units @ $20.00
15 Purchase100 units @ $13.00
24 Sales150 units @ $21.00
A. $2,260
B. $3,180
C. $1,860
D. $3,580
E. $2,100
8. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.
Date Activities Units Acquired at Cost Units Sold at Retail
May 1 Beginning Inventory 150 units @ $10.00
5 Purchase 220 units @ $12.00
10 Sales 140 units @ $20.00
15 Purchase 100 units @ $13.00
24 Sales 150 units @ $21.00
A. $2,260
B. $3,180
C. $1,860
D. $3,580
E. $2,100
