Acc225 Fundamental Accounting Principles: P5-4A BizKid Company’s adjusted trial balance

Acc225 Fundamental Accounting Principles

Problem 5-4A
BizKid Company’s adjusted trial balance on August 31, 2005, its fiscal year-end, follows:
Debit Credit
Merchandise inventory 31,000
Other (noninventory) assets 120,400
Total liabilities 35,000
N. Kidman, Capital 101,650
N. Kidman, Withdrawals 8,000
Sales 212,000 S
ales discounts 3,250
Sales returns and allowance 14,000
Cost of goods sold 82,600
Sales salaries expense 29,000
Rent expense—Selling space 10,000
Store supplies expense 2,500
Advertising expense 18,000
Office salaries expense 26,500
Rent expense—Office space 2,600
Office supplies expense 800
Totals 348,650 348,650
On August 31, 2004, merchandise inventory was $25,000.
Supplementary records of merchandising activities for the year ended August 31, 2005, reveal the following itemized costs: Invoice cost of merchandise purchases 91,000
Purchase discounts received 1,900
Purchase returns and allowances 4,400
Costs of transportation-in 3,900

Required
1. Compute the company’s net sales for the year.
2. Compute the company’s total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.
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