Question

Note: Problems 1-4 relate to the trial balance below. Note: Problems 5 and 6 are independent (use information provided for each of these problems only). 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 Problem 1 - Calculate Net Sales Problem 2 - Calculate Cost of Goods Sold. Note: Correct answer $1,561,125. Problem 3 - Calculate Shares outstanding. Problem 4 - Prepare the Income Statement

Answer 1

SOLUTION:

PROBLEM 1:COMPUTATION OF NET SALES

NET SALES=GROSS SALES - SALES RETURN - SALES DISCOUNT

HERE IT IS GIVEN THAT SALES REVENUE=3565000

SALES RETURN =175000

SALES DISCOUNT=155000

THEREFORE NET SALES=3565000-175000-155000

   =3235000

PROBLEM 2:COMPUTAION OF COST OF GOODS SOLD

COST OF GOODS SOLD=BEGINING INVENTORY+NET PURCHASES+FREIGHT IN -ENDING INVENTORY

HERE BEGINING INVENTORY=365000

NET PURCHASES = PURCHASES-PURCHASES DISCOUNT

=1750225-60000

=1690225

FREIGHT IN=65000

ENDING INVENTORY = 559100

THEREFORE COST OF GOODS SOLD=365000+1690225+65000-559100

=1561125

PROBLEM 3:COMPUTATION OF SHARES OUTSTANDING

OUTSTANDING SHARES=ISSUED STOCK-TREASURY STOCK

SINCE HERE THE TREASURY STOCK IS NOT AVAILABLE IT IS TAKEN AS 0.

SO,SHARES OUTSTANDING=125000-0

=125000