Financial Accounting Questions

| June 10, 2016

Question
"Week 3 Homework Template
Instructions: Only enter data in the yellow boxes. The remaining areas are already completed
for you.
Save the file as follows: lastnamewk1.docx
Submit to the assignment box before the due date. (Late assignments will receive a late
penalty).
Remember to show your calculations where necessary! (Use empty space under the tables
to do so).
Exercise 5-2
(a) Journalize the transactions, including explanations. (Note, enter all accounts
in one box. The dates have been included to help with formatting).
Account Titles and Explanation

Date
Sept.

6
9
10
12
12
14
14
20
20

Exercise 5-6 is on the next page

Debit

Credit

Exercise 5-6
(a) Prepare an income statement using the format presented on page 245. Assume a
25% tax rate.
(b) Calculate the profit margin ratio and gross profit rate.
ZHOU COMPANY
Income Statement
For the Month Ended January 31, 2014
Sales Revenues
Account title
Account title
Account title
Net Sales
Cost of goods sold
Gross profit
Operating Expenses
Account title
Account title
Account title
Account title
Total operating expenses
Income before income taxes
Income tax expense
Net Income
(b) Profit Margin Ratio
Enter text answer here.

Gross Profit Rate
Enter text answer here.

Amount
Amount
Amount

Amount (Total)

Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount

PROBLEM 5-5B
Prepare a correct detailed multiple-step income statement. Assume a tax rate of 25%.
WRIGHT COMPANY
Income Statement
For the Month Ended December 31, 2014
Sales Revenues
Account title
Account title
Account title
Net Sales
Cost of goods sold
Gross profit
Operating Expenses
Account title
Account title
Account title
Account title
Account title
Account title
Account title
Total operating expenses
Income from operations
Other revenues and gains
Account title
Other expenses and losses
Account title
Income before income taxes
Income tax expense
Net Income

Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount

Amount (Total)

Problem 6-2B
(a) Determine the Cost of Goods Available for Sale
Date

Explanation

Total

Units

Unit Cost

Total Cost

(b) Determine the ending inventory and cost of goods sold under each of the assumed cost
flow methods. Prove the accuracy of the cost of goods sold under FIFO and LIFO.
FIFO
(1) Ending Inventory
Date
Units

Total

Amount
Amount
Amount

Unit
Cost

Total

Total Cost
Amount
Amount
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Amount
Amount
Amount

Proof of Cost of Goods Sold (FIFO)
Date
Units
Unit
Total Cost
Cost
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Total
Amount
Total
Amount
LIFO
(1) Ending Inventory
Date
Units

Total

Amount
Amount
Amount

Unit
Cost

Total

Total Cost
Amount
Amount
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Proof of Cost of Goods Sold (LIFO)
Date
Units
Unit
Total Cost
Cost
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Total
Amount
Total
Amount
AVERAGE COST (Round to the nearest decimal, i.e., $1.01)

Amount
Amount
Amount

(1) Ending Inventory
Units

Total

Amount
Amount

Unit
Cost
Total

Total Cost
Amount
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Amount
Amount
Amount

(c) Which cost flow method results in (1) the highest inventory amount for the balance
sheet and (2) the highest cost of goods sold for the income statement?
Enter your answer here

Problem 6-3B
(a) Determine the Cost of Goods Available for Sale
Date

Explanation

Total

Units

Unit Cost

Total Cost

(b) Determine the ending inventory and the cost of goods sold under each of the assumed
cost flow methods (FIFO, LIFO and average-cost). Prove the accuracy of the cost of goods
sold under each method.
FIFO
(1) Ending Inventory
Date
Units

Total

Amount
Amount
Amount

Unit
Cost

Total

Total Cost
Amount
Amount
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Amount
Amount
Amount

Proof of Cost of Goods Sold (FIFO)
Date
Units
Unit
Total Cost
Cost
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Total
Amount
Total
Amount
LIFO
(1) Ending Inventory
Date
Units

Total

Amount
Amount
Amount

Unit
Cost

Total

Total Cost
Amount
Amount
Amount

Proof of Cost of Goods Sold (LIFO)
Date
Units
Unit
Total Cost
Cost
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Total
Amount
Total
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Amount
Amount
Amount

AVERAGE COST (Round to the nearest decimal, i.e., $1.01)
(1) Ending Inventory
Units

Total

Amount
Amount

Unit
Cost
Total

Total Cost
Amount
Amount

(2) Cost of Goods Sold
Cost of goods available
for sale
Less: ending inventory
Cost of Goods Sold

Amount
Amount
Amount

(c) Which cost flow method results in the lowest inventory amount for the balance sheet?
The lowest cost of goods sold for the income statement?
Enter your answer here

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