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Biweekly 3.1 - Q
Biweekly 3.1 - Q
Biweekly 3.1 - Q
for the
year ended December 31, 2017, are as follows:
Utilities 6,400
Dividends 33,000
Sales 451,000
Purchases 141,600
Freight-in 5,525
Adjusting Information
a. Cost of Inventory in the possession of consignees as of December 31, 2017, was not included in the
ending inventory balance - 18,600
b. After preparing an analysis of aged accounts receivable. a decision was made to increase the
allowance for doubtful accounts to a percentage of the ending accounts receivable balance - 2%
c. Purchase returns and allowances were recorded. They are computed as a percentage of purchases
(not including freight-in) - 6%
d. Sales commissions for the last day of the year had not been accrued. Total sales for the day - 3,600.
Average sales commissions as a percent of sales - 3%.
e. No accrual had been made for a freight bill received on January 3, 2018, for goods received on
December 29, 2017 - 570.
f. Advertising campaign was initiated November 1, 2015. This amount was recorded as "prepaid
advertising" and should be amortized over a six-month period. No amortization was recorded - 1,818.
Freight charges paid on sold merchandise were netted against sales. Freight charges on sales during
2017 - 3,500.
h. Depreciation expense on new forklift purchased March 1, 2017, had not been recognized. (Assume all
equipment will have no salvage value and the straight-line method is used. Depreciation is calculated to
the nearest month.) Purchase price - 7,800. Estimated life in years - 10.
i. A "real" account is debited upon the receipt of supplies. Supplies on hand at year-end - 1,225
Requirement:
1. Net sale
4. Operating expenses
5. Supplies expense
7. Interest revenue
9. Income taxes