85) The following information is available for Don't Pay a Cent Corporation for the year ended December 31, 2010: Sales revenue$300,000 Sales commissions$7,500 Purchases (cost)$200,000 ...





85) The following information is available for Don't Pay a Cent Corporation for the year ended December 31, 2010:



Sales revenue$300,000



Sales commissions$7,500



Purchases (cost)$200,000



Advertising$6,000



Freight-out$700



Freight-in$800



Sales returns$3,000



Purchase returns$2,000



Sales allowances$1,000



Purchase allowances$1,500



Sales discounts$7,000



Purchase discounts$8,000



Calculate the following for Don't Pay a Cent Corporation:



a.Net sales for 2010.



b.Net purchases for 2010.



86) The following data are available for Big Box Corporation:



Beginning inventory$12,500



Purchases returns and allowances800



Purchases45,000



Sales85,400



Purchases discounts1,200



Sales returns2,000



Sales discounts1,300



Operating expenses31,700



Ending inventory15,000



Compute:



a.Net purchases



b.Net sales



c.Cost of goods sold



d.Gross margin



e.Gross margin rate and allowances



f.Net income



87) What is the most important asset of a merchandising business?



88) What is the major expense shown on the income statement for a merchandising business?



89) State which of the following inventory methods would best attain the goals of management. Indicate your answer by writing the proper letter in the blank beside each specific goal.



a.FIFO



b.Weighted-averaged.



c.Specific identification



1.________Management wants to report approximate current inventory replacement costs on its year-end balance sheet during a period of rising prices.



2.________Management wants to maximize net income during a period of rising prices.



3.________The company sells yachts, deep-sea fishing boats, and off-shore speed boats.



4.________Management wants to minimize net income during a period of falling prices.



May 15, 2022
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