Preparing Multi-step & Single-step Income statements by finding out Sales & Cost of Goods Figures.
BizKid Company's adjusted trial balance on August 31, 2005, its fiscal year-end, follows:
Debit Credit
|
Merchandise inventory
|
$ 31,000
|
|
|
Other (noninventory) assets
|
120,400
|
|
|
Total liabilities
|
|
$ 35,000
|
|
N. Kidman, Capital
|
|
101,650
|
|
N. Kidman, Withdrawals
|
8,000
|
|
|
Sales
|
|
212,000
|
|
Sales discounts
|
3,250
|
|
|
Sales returns and allowances
|
14,000
|
|
|
Cost of goods sold
|
82,600
|
|
|
Sales salaries expense
|
29,000
|
|
|
Rent expense-Selling space
|
10,000
|
|
|
Store supplies expense
|
2,500
|
|
|
Advertising expense
|
18,000
|
|
|
Office salaries expense
|
26,500
|
|
|
Rent expense-Office space
|
2,600
|
|
|
Office supplies expense
|
800
|
|
|
Totals
|
$348,650
|
$348,650
|
On August 31, 2004, merchandise inventory was $25,000. Supplementary records of merchandising activities for the year ended August 31, 2005, reveal the following itemized costs:
Invoice cost of merchandise purchases . . . . . . . $91,000
Purchase discounts received . . . . . . . . . . . . . . . 1,900
Purchase returns and allowances . . . . . . . . . . . . 4,400
Costs of transportation-in . . . . . . . . . . . . . . . . 3,900
Required
1. Compute the company's net sales for the year.
2. Compute the company's total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.