Maurice Tutor
$15/per page/Negotiable
Use the following adjusted trial balance and additional information to complete the requirements.
|
KC ANTIQUES Adjusted Trial Balance December 31,2011 |
||
|
 |
Debit |
Credit |
|
Cash |
$ 7,000 |
 |
|
Accounts receivable |
13,000 |
 |
|
Merchandise inventory |
60,000 |
 |
|
Store supplies |
1,500 |
 |
|
Equipment |
45,600 |
 |
|
Accumulated depreciation—Equipment |
 |
$ 16,600 |
|
Accounts payable |
 |
9,000 |
|
Salaries payable |
 |
2,000 |
|
K. Carter, Capital |
 |
79,000 |
|
K. Carter, |
10,000 |
 |
|
Sales |
 |
343,250 |
|
Sales discounts |
5,000 |
 |
|
Sales returns and allowances |
6,000 |
 |
|
Cost of goods sold |
159,900 |
 |
|
Depreciation expense—Store equipment |
4,100 |
 |
|
Depreciation expense—Office equipment |
1,600 |
 |
|
Sales salaries expense |
30,000 |
 |
|
Office salaries expense |
34,000 |
 |
|
Insurance expense |
11,000 |
 |
|
Rent expense (70% is store, 30% is office) |
24,000 |
 |
|
Store supplies expense |
5,750 |
 |
|
Advertising expense |
31,400 |
 |
|
Totals |
$449,850 |
$449,850 |
KC Antiques’ supplementary records for 2011 reveal the following itemized costs for merchandising activities:
|
Invoice cost of merchandise purchases |
$150,000 |
|
Purchase discounts received |
2,500 |
|
Purchase returns and allowances |
2,700 |
|
Cost of transportation-in |
5,000 |
Required
1. Use the supplementary records to compute the total cost of merchandise purchases for 2011.
2. Prepare a 2011 multiple-step income statement. (Inventory at December 31, 2010, is $70,100.)
3. Prepare a single-step income statement for 2011.
4. Prepare closing entries for KC Antiques at December 31, 2011.
5. Compute the acid-test ratio and the gross margin ratio. Explain the meaning of each ratio and interpret them for KC Antiques.