ARELLANO UNIVERSITY

Jose Abad Santos Campus

Basic Education Department – Senior High School
3058 Taft Avenue Pasay City

FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 2

Activity Number 3
First Semester
School Year 2020 – 2021

Name: Princess S. Condes Date: September 30,2020

Grade and Section: 12-ABM 1 Teacher: Mr.Gerald Diadid

I. TRUE OR FALSE QUESTIONS. On the blank space provided before each number, write
“True” if the statement is correct, and “False” if the statement is incorrect.

True 1. A multiple-step income statement shows detailed computations of net sales and
reports subtotals for various groups of items.

False 2. Operating expenses in a multiple-step income statement are classified into two
categories: selling expenses and cost of goods sold.

False 3. Expenses related to accounting, human resource management, and financial

management are classified as non-operating expenses in a multiple-step income statement.

True 4. When a company preparing a multiple-step income statement has no reportable non-
operating activities, its income from operations is simply labeled net income.

True 5. A single-step income statement includes cost of goods sold as another expense and
shows only one subtotal for total expenses.

True 6. Advertising expense is reported as part of operating expenses in the seller's multiple-
step income statement.

False 7. Comprehensive Income includes gains and losses also included in the determination
of net income

True 8. If a company has beginning inventory of 15,000, purchases during the year of 75,000,
and ending inventory of 20,000, cost of goods sold equals 70,000.

True 9. Gross profit equals net sales of inventory less cost of goods sold.

False 10. Sales revenue minus cost of goods sold is referred to as operating income.

True 11. Single step Income Statement is to subtract total expenses from total revenues to
determine net income.

False 12. The other name for Gross Profit is Gross Margin.

II. PROBLEM SOLVING. Write your answers on the blank space provided.
1. A multi-step income statement showed net sales of 870,000, cost of goods sold of
376,000, and total operating expenses of 330,000 for the fiscal year ended December
31, 2020.
a. What was the gross profit? _Php 494,000_______________
b. What was the net income from operations? ___Php 164,000_____________
2. NEW ZEALAND Company reported the following information on its income statement for
the first quarter of the year.
January February Marc
h
Sales 375,000 750,000 ?
Sales returns and allowances 32,000 ? 25,00
0
Sales discounts 12,000 9,000 15,00
0
Net sales ? 736,000 ?
Cost of goods sold 255,000 ? 620,0
00
Gross profit ? 310,000 185,0
00

Required: Calculate the missing information. a.

Sales in March = _845,000_______________
b. Sales returns and allowances in February = __5,000______________
c. Net Sales in January = __331,000______________
d. Net Sales in March = _805,000_______________
e. Cost of Goods Sold in February = __426,000______________
f. Gross Profit in January = __76,000______________

3. Using the information given, answer the questions below:

Sales – 14,000
Purchases – 3,000
Purchase returns – 500
Purchase discounts –
300
Freight in – 150
Beginning inventory – 2,000
Ending inventory – 1,500
Sales return and allowances –
600
Sales discount – 900

a. How much is the Net Purchases? _2,350_____________

b. How much is the Cost of Goods Available For Sale? __4,350____________
c. How much is the Cost of Goods Sold? _2,850_____________
d. How much is the Net Sales? __12,500____________
e. How much is the Gross Profit? _9,660_____________