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Question 10 (15 points)
The following is a partial Adjusted Trial Balance for Alpha Company for the month:
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Question & Answer: The following is a partial Adjusted Trial Balance for Alpha Company for the month:…..
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| Alpha Company | ||
| Adjusted Trial Balance (partial) | ||
| January 31, 2016 | ||
| Accounts | Debit | Credit |
| Inventory | $2,750 | |
| Sales | $11,500 | |
| Sales Discounts | 200 | |
| Sales Returns & Allowances | 1,200 | |
| Purchases | 4,000 | |
| Purchases Discounts | 150 | |
| Purchase Returns & Allowances | 450 | |
| Freight In | 50 | |
| Advertising Expense | 150 | |
| Depreciation Expense | 130 | |
| Freight Out | 70 | |
| Income Tax Expense | 500 | |
| Salaries Expense | 550 | |
| Utilities Expense | 100 | |
Additionally, Inventory for December 31, 2015 was $2,600. Prepare a multiple-step income statement.
What amount should Alpha Company report on a Multi-Step Income Statement for the following items:
1. Net Sales
2. Cost of Goods Available for Sales
3. Gross Profit
4. General & Administrative Expenses
5. Income before Taxes
Expert Answer
| Net sales | ||
| Sales | $11,500 | |
| Sales Discounts | -200 | |
| Sales Returns & Allowances | -1,200 | |
| Net sales | $10,100 | |
| Cost of Good sold Available for sales | ||
| Inventory | $2,750 | |
| Purchases | 4,000 | |
| Purchases Discounts | -150 | |
| Purchase Returns & Allowances | -450 | |
| Freight In | 50 | |
| Net purchases | $3,450 | |
| Cost of Good sold Available for sales | $6,200 | |
| Gross profit | ||
| Cost of Good sold Available for sales | $6,200 | |
| Less: ending Inventory | 2600 | |
| Cost of good sold | $3,600 | |
| General & administrative expenses | ||
| Depreciation Expense | 130 | |
| Salaries Expense | 550 | |
| Utilities Expense | 100 | |
| General & administrative expenses | 780 | |
| Income before taxes | 5500 | |
| 10100-3600-780-70-150 | ||
| Multiple Income statemrnt | ||
| Sales | 10100 | |
| Less: cost of good sold | $3,600 | |
| Gross Profit | $6,500 | |
| Less: | ||
| Selling Expenses | 220 | |
| General & administrative expenses | 780 | 1000 |
| Income before taxes | $5,500 | |
| Less: income tax expense | 500 | |
| Net Income | $5,000 |
