The following information relates to Larkspur, Inc. for the year 2017.

Problem-1

The following information relates to Larkspur, Inc. for the year 2017.

Retained earnings, January 1, 2017 $58,560 Advertising expense $2,200
Dividends during 2017 6,100 Rent expense 12,690
Service revenue 76,250 Utilities expense 3,780
Salaries and wages expense 34,160 Other comprehensive income (net of tax) 490

Problem-2

Carla Vista Co. sold goods with a total selling price of $809,200 during the year. It purchased goods for $389,700 and had beginning inventory of $67,700. A count of its ending inventory determined that goods on hand was $60,900.
What was its cost of goods sold?

Problem-3

Assume that Sheridan Company uses a periodic inventory system and has these account balances: Purchases $395,000; Purchase Returns and Allowances $11,900; Purchase Discounts $7,600; and Freight-in $17,400. Sheridan Company has beginning inventory of $62,000, ending inventory of $85,700, and net sales of $645,000.
Determine the amounts to be reported for cost of goods sold and gross profit.

Problem-4

Swifty Corporation reported net sales of $251,100, cost of goods sold of $102,400, operating expenses of $49,500, net income of $39,900, beginning total assets of $482,800, and ending total assets of $626,100.
Calculate profit margin and gross profit rate.

Problem-5

Prepare the journal entries to record these transactions on Sunland Company’s books using a periodic inventory system.

(a) On March 2, Sunland Company purchased $901,000 of merchandise from Blossom Company, terms 3/10, n/30.
(b) On March 6, Sunland Company returned $101,300 of the merchandise purchased on March 2.
(c) On March 12, Sunland Company paid the balance due to Blossom Company.

Problem-6

This information relates to Wildhorse Co.

1. On April 5, purchased merchandise from Sandhill Company for $27,400, terms 3/10, n/30.
2. On April 6, paid freight costs of $740 on merchandise purchased from Sandhill Company.
3. On April 7, purchased equipment on account for $31,200.
4. On April 8, returned $5,200 of April 5 merchandise to Sandhill Company.
5. On April 15, paid the amount due to Sandhill Company in full.

(a) Prepare the journal entries to record the transactions listed above on Wildhorse Co.’s books. Wildhorse Co. uses a perpetual inventory system.

(b) Assume that Wildhorse Co. paid the balance due to Sandhill Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

Problem-7

Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred.

Sept. 6 Purchased calculators from Dragoo Co. at a total cost of $1,610, terms n/30.
9 Paid freight of $40 on calculators purchased from Dragoo Co.
10 Returned calculators to Dragoo Co. for $52 credit because they did not meet specifications.
12 Sold calculators costing $580 for $760 to Fryer Book Store, terms n/30.
14 Granted credit of $45 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $32.
20 Sold calculators costing $650 for $800 to Heasley Card Shop, terms n/30.

Journalize the September transactions.

Problem-8

The following transactions are for Oriole Company.

1. On December 3, Oriole Company sold $516,800 of merchandise to Cullumber Co., terms 3/10, n/30. The cost of the merchandise sold was $310,100.
2. On December 8, Cullumber Co. was granted an allowance of $23,300 for merchandise purchased on December 3.
3. On December 13, Oriole Company received the balance due from Cullumber Co.

(a) Prepare the journal entries to record these transactions on the books of Oriole Company. Oriole Company uses a perpetual inventory system.

(b) Assume that Oriole Company received the balance due from Cullumber Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2.

Question-9

On June 10, Sandhill Company purchased $6,900 of merchandise from Carla Vista Company, terms 2/10, n/30. Sandhill Company pays the freight costs of $380 on June 11. Goods totaling $500 are returned to Carla Vista Company for credit on June 12. On June 19, Sandhill Company pays Carla Vista Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Prepare separate entries for each transaction on the books of Sandhill Company.

Problem-10

Prepare the journal entries to record the following transactions on Blossom Company’s books using a perpetual inventory system.

(a) On March 2, Blossom Company sold $853,600 of merchandise to Sunland Company, terms 3/10, n/30. The cost of the merchandise sold was $540,300.
(b) On March 6, Sunland Company returned $114,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $68,200.
(c) On March 12, Blossom Company received the balance due from Sunland Company.

Problem-11

The following information is available for Bridgeport Corp. for the year ended December 31, 2017:

Other revenues and gains $10,900 Sales revenue $659,100
Other expenses and losses 14,900 Operating expenses 234,400
Cost of goods sold 243,500 Sales returns and allowances 40,000
Other comprehensive income 5,200

Prepare a multiple-step income statement for Bridgeport Corp and comprehensive income statement. The company has a tax rate of 30%. This rate also applies to the other comprehensive income.

 

The adjusted trial balance of Oriole Company shows these data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue $907,300; Freight-Out $13,600; Sales Returns and Allowances $20,600; and Sales Discounts $14,900.

Prepare the sales section of the income statement.

Problem-12

Presented below is information for Sunland Company for the month of January 2017.

Cost of goods sold $211,900 Rent expense $34,600
Freight-out 9,800 Sales discounts 8,800
Insurance expense 13,900 Sales returns and allowances 17,100
Salaries and wages expense 61,800 Sales revenue 394,000
Income tax expense 4,500 Other comprehensive income (net of $400 tax) 2,000