ACCT 215 Chapter 25 Problems (2015)

| June 8, 2016

Question
Problem 25.01A
New2U
Income Statement
Year Ended December 31, 2013
Department
A

Department
B

Total

Operating Revenues
Net Sales
Cost of Goods Sold

Delivered Cost of Purchases
Net Delivered Cost of Purchases
Total Merchandise Available for Sale
Cost of Goods Sold
Gross Profit on Sales
Operating Expenses
Direct Expenses

Total Direct Expenses
Contribution Margin
Indirect Expenses

Total Indirect Expenses
Net Income from Operations
Other Income
Other Expense
Net Income for the Year
ALLOCATION OF INDIRECT EXPENSES

Department A
Department B

Insurance Expense
Proportion of gross assets
before depreciation and
Insurance
ending inventory
Expense
X
X

Department
Allocation
=
=

Rent Expense
Proportion of floor
space occupied
Department A
Department B

Rent
Expense
X
X

Department
Allocation
=
=

Utilities Expense
Proportion of floor
space occupied
Department A
Department B

Department A
Department B

Utilities
Expense
X
X

Department
Allocation
=
=

Office Salaries Expense
Office
Proportion of total
Salaries
gross sales
Expense
X
X

Department
Allocation
=
=

Other Office Expenses
Other
Office
Expenses

Proportion of total
gross sales
Department A
Department B

X
X

Department
Allocation
=
=

Department A
Department B

Depreciation Expense – Office Equipment
Depreciation
Proportion of total
Expense
Department
gross sales
Off. Equip.
Allocation
X
=
X
=

Department A
Department B

Uncollectible Accounts Expense
Uncollectible
Proportion of total
Accounts
Department
net sales
Expense
Allocation
X
=
X
=

Department A
Department B

Depreciation Expense – Furniture and Fixtures
Depreciation
Proportion of cost of
Expense
Department
furniture and fixtures
Furn. & Fixt.
Allocation
X
=
X
=

Given Data P25.01A
New2U
Adjusted Trial Balance
Selected Information
December 31, 2013

Merchandise Inventory, Jan. 1
Merchandise Inventory, Dec. 31
Sales
Sales Returns and Allowances
Purchases
Freight In
Purchases Returns and Allowances
Sales Salaries Expense
Advertising Expense
Store Supplies Expense
Cash Short or Over
Insurance Expense
Rent Expense
Utilities Expense
Office Salaries Expense
Other Office Expense
Uncollectible Accounts Expense
Depreciation Expense – Furniture & Fixtures
Depreciation Expense – Office Equipment
Interest Income
Interest Expense

Department
A
$45,000
41,000
536,250
4,200
200,000
500
1,500
100,000
15,000
660
40

Department
B
$15,000
11,000
288,750
2,800
115,000
500
500
50,000
5,000
20
80

Total
$60,000
52,000
825,000
7,000
315,000
1,000
2,000
150,000
20,000
680
120
15,000
36,000
6,000
40,000
1,400
5,000
6,000
500
300
500

Allocation Information
1. Insurance Expense: In proportion to the total of furniture and fixtures and the ending inventory
in the departments.
Department A
130,000
Department B
70,000
Totals
200,000
2. Rent Expense and Utilities Expense: On the basis of floor space occupied as follows:
Department A
Department B
Totals

4,500 square feet
1,500 square feet
6,000 square feet

3. Office Salaries Expense, Other Office Expenses and Depreciation Expense-Office Equipment:
on the basis of the gross sales in each department.
4. Uncollectible Accounts Expense: on the basis of net sales in each department.
5. Depreciation Expense – Furniture and Fixtures: in proportion to cost of furniture and fixtures in each
department. (Round to nearest dollar)
Department A
30,000
Department B
20,000
Totals
50,000

Student Name:
Class:
Problem 25.02A
YARD SHOP
Income Statement
Year Ended December 31, 2013
Plants

Net Sales
Cost of Goods Sold

Net Purchases
Cost of Goods Available for Sale
Cost of Goods Sold
Gross Profit
Contribution Margin
Net Income (Loss) from Operations
Net Sales
Percent of Total Net Sales
Times Total Indirect Expenses
Allocation of Indirect Expenses
Contribution Margin
Indirect Expenses
Net Income (Loss) from Operations

Chemicals

Tools

Total

Given Data P25.02A
YARD SHOP
Selected Information
December 31, 2013

Allocated indirect expenses
Beginning merchandise inventory
Direct Expenses
Ending merchandise inventory
Purchases
Purchases returns and allowances
Sales
Sales returns and allowances

Plants
$9,600
2,600
30,000
2,500
50,000
500
126,750
1,750

Chemicals
$5,400
2,600
17,500
2,400
47,000
400
75,500
500

Tools
$5,000
2,900
15,500
2,000
36,000
300
50,400
400

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