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Jobisdone [24]
3 years ago
15

Cherokee Inc. is a merchandiser that provided the following information: Number of units sold 14,000 Selling price per unit $ 16

.00 Variable selling expense per unit $ 1.00 Variable administrative expense per unit $ 1.00 Total fixed selling expense $ 20,000 Total fixed administrative expense $ 13,000 Beginning merchandise inventory $ 12,000 Ending merchandise inventory $ 23,000 Merchandise purchases $ 87,000 Required: 1. Prepare a traditional income statement. 2. Prepare a contribution format income statement. HintsReferenceseBook
Business
1 answer:
DanielleElmas [232]3 years ago
5 0

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the cost of goods sold:</u>

<u></u>

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS= 12,000 + 87,000 - 23,000

COGS= $76,000

<u>Traditional format income statement:</u>

Sales= 14,000*16= 224,000

COGS= (76,000)

Gross profit= 148,000

Total selling expense= (20,000 + 14,000*1)= (34,000)

Total administrative expense= (13,000 + 14,000*1)= (27,000)

Net operating income= 87,000

<u>Contribution format income statement:</u>

Sales= 14,000*16= 224,000

Total variable cost= (76,000 + 14,000 + 14,000)= (104,000)

Contribution margin= 120,000

Total fixed selling expense= (20,000)

Total fixed administrative expense= (13,000)

Net operating income= 87,000

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The following transactions are for Kingbird Company.
raketka [301]

Answer and Explanation:

The Journal entries are shown below:-

1. Account Receivable Dr, $450,000  

             To Sales revenue $450,000

(Being credit sales is recorded)

here we debited the accounts receivable as it increased the assets and we credited the sales revenue as it also increased the sales.

Cost of goods sold Dr, $310,000

         To Inventory $310,000

(Being Cost of goods sold is recorded)

here we debited the cost of goods sold as it increased the expenses and we credited the inventory as it decreased the assets

2. Sales return and allowances Dr, $ 22,000

         To Account Receivable $22,000

(Being sales return is recorded)

here we debited the sales return and allowances as it increased the sales return and we credited the accounts receivable as it decreased the assets

3. Cash Dr, $423,720

Sales discount Dr, $4,280 ($428,000 × 1%)

     To Account Receivable $428,000   ($450,000 - $22,000)

(Being cash and sales discount is recorded)

Here we debited the cash and sales discount as it increased the assets and sales discount and we credited the accounts receivable as it decreased the assets

8 0
3 years ago
Randomly listed below are the steps for preparing a trial balance: (1) Verify that the total of the Debit column equals the tota
liberstina [14]

A test balance is used to detect any calculation error that may have occurred within the accounting system. For this, it is sought to verify if the total debits and the total credits are equal, for this the balance of all accounting books is compiled in column totals of both debit and credit. A company usually prepares a trial balance periodically, usually at the end of each reporting period.

In this case, to carry out the trial balance, you must first clarify the name of the company, the title of the trial balance and the date on which the trial balance is prepared, then proceed to list the ledger accounts and enter the debit and credit balances in the respective columns, then the columns are totalized and finally it is verified that the credit totals are equal to the debit totals

Answer

The correct order of the steps is (3), (2), (4) and (1)

7 0
3 years ago
Why the companies need to extend their product life cycle?
just olya [345]

Answer:

because of the product and the correct one is the one of the product is not working properly

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3 years ago
Commissions charged on the trading of stock are
gtnhenbr [62]

Answer:

D. Charged on the buying and selling of stock.

Explanation:

Trade is defined as the action of buying and selling goods and services. And a trade commission is payed whenever an action is being traded, whether it is on the sale or on the buying.

8 0
3 years ago
Read 2 more answers
you borrowed $4 from your roomate to buy backup calculator batteries on the way to the exam. the next day, you repaid the $4 plu
LiRa [457]

Answer:

0.2840 or 28.40%

Explanation:

The formula for EAR= (1 + i/n)^n - 1

Where i= stated interest rate

n= number of compounding periods

In this case since the interest he paid is 1 cent, to convert it into percentage, we divide it by the dollar and multiply by 100

Note: 100 cent = 1 dollar

Therefore 4 dollars= 400 cents

To get the Interest rates= 1/400 x 100

= 0.25

n= 365 since we are computing daily

(1 + 0.25/365)^365 - 1

(1 + 0.000685)^365 - 1

(1.000685)^365 - 1

1.2840 - 1

0.2840 or 28.40%.

3 0
3 years ago
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