Question

Note: Problems 1-4 relate to the trial balance below. Marcell Sports Inc. Acct 311 - Quiz 3 of 6 - Trial Balance Credit Debit 140,000 475,000 $ 28,225 50,000 17,000 365,000 1,385,000 265,000 1,500,000 550,000 1,325,000 Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Supplies Inventory, 1/1/17 Equipment Accumulated Deperciation - Equipment Building Accumulated Deperciation - Building Land Accounts Payable Salaries and Wages Payable Notes Payable Mortgage Payable Common Stock, Par Value $0.05 APIC Retained Earnings Dividends Sales Revenue Sales Discounts Sales Returns and Allowances Purchases Purchase Discounts Freight In Selling Expenses Administrative Expenses Rent Revenue Income Tax Expense Gain on Sale of Land 365,000 65,000 1,250,000 1,325,000 125,000 475,000 424,000 230,000 3,565,000 155,000 175,000 1,750,225 60,000 65,000 355,000 455,000 55,000 285,000 175,000 8,727,225 8,727,225 $ Physical Inventory 31-Dec $ 559, 100 COGS Year $ 1,561,125

Answer 1

Calculation of net sales

particulars	Amount	Amount
Sales revenue		$        3,565,000
Less:-
Sales return and allowances	$        175,000
Sales discount	$        155,000	$            330,000
Net sales		$        3,235,000

Calculaton of cost of goods sold

particulars	Amount	Amount
Opening inventory(01/01/2017)		$            365,000
Add:-
Purchase (net of discount)	$    1,690,225
Frieght in	$          65,000	$        1,755,225
		$        2,120,225
Less:- Closing inventory(12/31/2017)		$            559,100
Cost of Goods Sold		$        1,561,125

Note :- Purchase net of discount = (Purchase - Purchase discount) = ($1,750,225-$60,000) = 1,690,225

Calculation of shares outstanding

shares outstanding = (Common stock value/per value) = ($125,000/ $ 0.05) = 2500000 shares

Income statement, as on 12/31/2017
particulars	Amount	Amount
Sales ( net)		$        3,235,000
Cost of goods sold		$        1,561,125
Gross profit		$        1,673,875
Operating Expenses
Salaries and Wages payable	$          65,000
Selling expenses	$        355,000
Administrative expenses	$        455,000	$            875,000
Income from operations		$            798,875
Non operating income
Rent revenue	$          55,000
Gain on sale of land	$        175,000	$            230,000
		$        1,028,875
Non operating expenses
	-	-
Pre tax income		$        1,028,875
Income tax expense		$            285,000
Net income for the year		$            743,875