1. Presented below are selected transactions for Manclave Corporation during July.

Jul 1 Sold merchandise to Regina Inc. for $1,000, terms 3/10, n/30. The
merchandise sold cost $600.
2 Purchased merchandise from Novalle Corporation for $5,200, terms
4/10, n/30.
3 Paid freight charges of $150 on items purchased on July 2.
4 Purchased merchandise from Ollie Company Ltd. for $7,500, n/30.
10 Received payment from Regina Inc. for purchase of July 1.
11 Paid Novalle Corporation for July 2 purchase.

Instructions
(a) Record the above transactions for Manclave Corporation, assuming a
perpetual inventory system is used. The cost of goods sold on July 1 was
determined to be $400.
(b) Record the above transactions for Manclave Corporation, assuming a periodic
inventory system is used.

(a) Perpetual
Jul 1 Accounts Receivable............................................... 1,000
Sales................................................................ 1,000

Cost of Goods Sold.................................................. 600

Inventory......................................................... 600

2 Inventory................................................................. 5,200
Accounts Payable ........................................... 5,200

3 Inventory................................................................. 150
Cash................................................................. 150

4 Inventory................................................................. 7,500
Accounts Payable ........................................... 7,500
 10 Cash ($1,000 x 97%)................................................ 970
Sales Discounts ($1,000 x 3%)................................. 30
Accounts Receivable....................................... 1,000

11 Accounts Payable.................................................... 5,200

Inventory ($5,200 x 4%).................................. 208
Cash ($5,200 x 96%)........................................ 4,992

(b) Periodic
Jul 1 Accounts Receivable............................................... 1,000
Sales................................................................ 1,000

2 Purchases................................................................ 5,200
Accounts Payable............................................ 5,200

3 Freight in................................................................. 150

Cash............................................................... 150

4 Purchases................................................................ 7,500
Accounts Payable............................................ 7,500

10 Cash ($1,000 x 97%)................................................ 970

Sales Discounts ($1,000 x 3%)................................. 30
Accounts Receivable....................................... 1,000

11 Accounts Payable.................................................... 5,200

Purchase Discounts ($5,200 x 4%).................. 208
Cash ($5,200 x 96%)........................................ 4,992
2. The following information was taken from the adjusted trial balance of Lucifer
Lighting Inc. at December 31, 2018. All accounts have normal balances.

Accounts payable $ 52,000

Accounts receivable 18,700
Accumulated depreciation—Building 44,900
Advertising expense 38,500
Building 600,000
Cash 85,000
Common shares 417,500
Cost of goods sold 410,500
Depreciation expense 12,000
Freight out 22,000
Interest expense 5,700
Interest revenue 2,000
Rental revenue 6,000
Retained earnings, Jan 1 154,800
Salaries expense 279,500
Salaries payable 5,200
Sales 798,500
Sales discounts 8,200
Sales returns and allowances 29,000
Utilities expense 9,200

Instructions
Use the above information to prepare a multiple-step income statement for the
year ended December 31, 2018.
 LUCIFER LIGHTING INC.
Income Statement
Year Ended December 31, 2018
___________________________________________________________
Sales............................................................................ $798,500
Less: Sales returns and allowances.............................$ 29,000
Sales discounts................................................... 8,200 37,200
Net sales...................................................................... 761,300
Cost of goods sold....................................................... 410,500
Gross profit.................................................................. 350,800
Operating expenses
Salaries expense....................................................$279,500
Advertising expense............................................... 38,500
Freight out.............................................................. 22,000
Depreciation expense............................................. 12,000
Utilities expense..................................................... 9,200
Total operating expenses.................................. 361,200
Loss from operations................................................... (10,400)
Other revenues and gains
Interest revenue...................................................... $ 2,000
Rental revenue....................................................... 6,000
Other expenses and losses
Interest expense..................................................... 5,700 2,300
Loss............................................................................. $ (8,100)