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1)

 ENTRY 1 - CLOSE REVENUES
Date Description
Sales revenues
Interest revenue
Income summary

Debit
244000
2000

Credit

246000

 ENTRY 2 - CLOSE EXPENSES, SALES R&A, AND SALES
DISCOUNTS
Date Description
Debit
Credit
Income summary
193000
Cost of goods sold
Sales return and allowance
Sales discount
Salaries expenses
Rent expenses
Utilities expenses
Depreciation expenses
Supplies expenses
Interest expense

 ENTRY 3 - CLOSE income summary
Date Description
Income summary
Capital

81000
10000
8000
727000
7700
5800
2700
2200
2900

Debit
53000

Credit
53000

CLOSE withdrawal Date Description Capital Withdrawal Debit 48000 Credit 48000 . ENTRY 4 .

OTHER EXPENSE Interest expenses NET INCOME 91100 ----- 2700 72700 7700 5800 2200 57000 2000 2000 2900 2900 3) Gross profit percentage = gross profit / sales = 145000/ 226000= 0.COST OF MERCHANDISE SOLD = GROSS PROFIT .64=64% 53000 .OPERATING EXPENSES Selling Expenses (81000) 145000 Administrative Expenses Depreciation expenses Salaries expenses Rent expenses Utilities expense Supplies expenses = INCOME FROM OPERATIONS + OTHER INCOME Interest revenue .2) – MULTIPLE-STEP INCOME STATEMENT NET SALES Sales Less sales discount Less sales return and allowance 226000 244000 ( 8000) (10000) .

Problem 5-1 Date 3 Date 9 12 Date Date 15 Date 16 Date 18 Description Inventory Account payable Debit 1600 Description Account payable Inventory Debit 640 Cash Sales 920 Description COGS Inventory Debit 550 Description Inventory Account payable Debit 5000 Description Freight in cash Debit 260 Description Account receivable Debit 2000 Credit 1600 Credit 640 920 Credit 550 Credit 5000 Credit 260 Credit .

Sales Cogs Inventory Date 22 Date 24 Date 28 Date 28 2000 1180 1180 Description Sales return and allowance Account receivable Inventory Cogs Debit 800 Description Account payable Cash inventory Debit 5000 Description Cash Sales discount Account receivable Debit 1176 24 Description Account payable cash Debit 960 Credit 800 480 480 Credit 4850 150 Credit 1200 Credit 960 .