Exam 5: Merchandising Operations and the Multiple-Step Income Statement

A merchandiser that sells directly to consumers is a

Income from operations appears on both the single-step and multiple-step forms of an income statement.

Nonoperating activities include revenues and expenses that are related to the company's main line of operations.

Gross profit rate is computed by dividing cost of goods sold by net sales.

American Importers reports net income of $50,000 and cost of goods sold of $450,000. If the company's gross profit rate was 40%, net sales were

Bazil Company purchased merchandise on account from Office Suppliers for $62,000, with terms of 1/10, n/30. During the discount period, Bazil returned some merchandise and paid $59,400 as payment in full. Bazil uses a perpetual inventory system. Prepare the journal entries that Bazil Company made to record the: (1) purchase of merchandise. (2) return of merchandise. (3) payment on account. (b) Weaver Company sold merchandise to Moore Company on account for $84,000 with credit terms of ?/10, n/30. The cost of the merchandise sold was $63,000. During the discount period, Moore Company returned $4,000 of merchandise and paid its account in full (minus the discount) by remitting $78,400 in cash. Both companies use a perpetual inventory system. Prepare the journal entries that Weaver Company made to record the: (1) sale of merchandise. (2) return of merchandise. (3) collection on account.

After gross profit is calculated, operating expenses are deducted to determine

For a jewelry retailer, which is an example of Other Revenues and Gains?

United Services and Supplies reports net income of $60,000 and cost of goods sold of $360,000. US&S's gross profit rate was 40%, net sales were

For the income statement, IFRS requires

A credit sale of $700 is made on July 15, terms 2/10, net/30, on which a return of $50 is granted on July 18. What amount is received as payment in full on July 24?

Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.

Which of the following companies would be most likely to use a perpetual inventory system?

When the terms of sale include a sales discount, it usually is advisable for the buyer to pay within the discount period.

Presented below is information for Zales Company for the month of January 2014. Cost of goods sold \ 280,000 Rent expense \ 35,000 Freight-0ut 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Salaries and wages expense 42,000 Sales revenue 421,000 Instructions (a) Prepare a multiple-step income statement. (b) Calculate the profit margin and the gross profit rate.

A perpetual inventory system would most likely be used by a(n)

Financial information is presented below: Operating expenses \ 35,000 Sales returns and allowances 12,000 Sales discounts 3,000 Sales revenue 140,000 Cost of goods sold 85,000 The gross profit rate would be

Ramos Company receives a payment on account from Martinez Industries. Based on the original sale of $8,000 using the periodic inventory approach, Ramos honors the 3% cash discount and records the payment. Which of the following is the correct entry for Ramos to record?

Income from operations appears on

The gross profit rate is computed by dividing gross profit by