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Answer Key PROBLEM #1

Date Accounts & Explanations 1/2 Merchandise Inventory A/P-Snake Oil 1/3 Merchandise Inventory Cash 1/4 Rent Expense Cash 1/5 A/R-Beanie's Pharmacy Sales Cost of Merchandise Sold Merchandise Inventory 1/6 Advertising Expense Cash 1/9 Merchandise Inventory Cash 1/10 A/P-Snake Oil Cash Merchandise Inventory 1/14 Cash Sales Discounts A/R-Beanie's Pharmacy 1/15 Sales Salaries Expense Office Salaries Expense Cash 1/16 Merchandise Inventory A/P-Scorpion Supply Co. 1/19 A/P-Scorpion Supply Co. Merchandise Inventory 1/20 Cash Sales Cost of Merchandise Sold Merchandise Inventory 1/21 A/R-Nature's Products Sales Cost of Merchandise Sold Merchandise Inventory

Debit 8,000 160

Credit 8,000 160

2,400 2,400 3,500 3,500 1,610 1,610 220 220 2,000 2,000 8,000 7,840 160 3,430 70 3,500 1,200 900 2,100 4,000 4,000 400 400 7,000 7,000 3,220 3,220 12,000 12,000 5,520 5,520

Date Accounts & Explanations 1/24 Sales Returns & Allowances A/R-Nature's Products Merchandise Inventory Cost of Goods Sold 1/25 A/P-Scorpion Supply Co. Cash Merchandise Inventory 1/30 Cash Sales Discounts A/R-Nature's Products 1/31 Delivery Expense Cash 1/31 Sales Salaries Expense Office Salaries Expense Cash

Debit 500 230

Credit 500 230

3,600 3,528 72 11,270 230 11,500 300 300 1,200 900 2,100

Dolly's Celebrity Dolls Income Statement For the Month Ended 01/31/0X Revenue from Sales Sales Less: Sales Returns & Allowances Sales Discounts Net Sales Cost of Merchandise Sold Gross Profit Operating Expenses Selling Expenses: Sales Salaries Expense Advertising Expense Delivery Expense Misc. Expense Total Selling Expenses Administrative Expenses: Rent Expense Office Salaries Expense Supplies Expense Insurance Expense Depreciation Expense Misc. Admin. Expense Total Administrative Expenses Total Operating Expenses Income from Operations Other Income & Expense Rent Income Interest Expense Net Other Income Net Income

$82,000 $2,000 1,040 3,040 78,960 41,944 37,016

$9,600 1,200 1,400 300 $12,500

9,800 7,200 500 500 1,300 200 19,500 32,000 5,016

2,500 300 2,200 7,216

Dolly's Celebrity Dolls Statement of Owner's Equity For the Month Ended 01/31/0X Dolly, Capital 01/01/0X Add: Net Income Less: Withdrawals Dolly, Capital 01/31/0X $221,800 7,216 229,016 2,000 $227,016

Dolly's Celebrity Dolls Balance Sheet January 31, 200X Assets Current Assets Cash A/R Merchandise Inventory Supplies Prepaid Insurance Total Current Assets Property, Plant & Equipment Furniture & Equipment Less: Accumulated Depreciation Net Plant Assets Total Assets Liabilities & Equity Current Liabilities Accounts Payable Salaries Payable Interest Payable Current Portion of Long Term Debt Total Current Liabilities Long-Term Liabilities Note Payable Total Liabilities Owner's Equity Dolly, Capital 01/31/XX Total Liabilities & Equity $20,400 4,200 300 6,000 30,900 $55,416 25,600 117,000 4,100 5,500 $207,616

140,000 65,700 74,300 $281,916

24,000 54,900

227,016 $281,916

PROBLEM #3 Date Accounts & Explanations 1/31 Sales Rent Income Income Summary 1/31 Income Summary Sales Returns & Allowances Sales Discounts Cost of Merchandise Sold Sales Salaries Expense Advertising Expense Delivery Expense Misc. Selling Expense Rent Expense Office Salaries Expense Supplies Expense Insurance Expense Depreciation Expense Misc. Admin. Expense Interest Expense 1/31 Income Summary Dolly, Capital 1/31 Dolly, Capital Dolly, Drawing Debit 82,000 2,500 77,284 2,000 1,040 41,944 9,600 1,200 1,400 300 9,800 7,200 500 500 1,300 200 300 7,216 7,216 2,000 2,000 Credit 84,500

Problem 4 - FIFO

DATE 1-Oct 8-Oct

QTY.

PURCHASES UNIT COST

TOTAL COST

COST OF MERCHANDISE SOLD UNIT TOTAL QTY. COST COST

INVENTORY BALANCE UNIT TOTAL QTY. COST COST 50 15.00 750 50 20 15.00 18.00 15.00 18.00 750 360 480 360

20

18.00

360

11-Oct

18

15.00

270

32 20

17-Oct

32 18 30 20.00 600

15.00 18.00

480 324

2 2 30

18.00 18.00 20.00

36 36 600

21-Oct

29-Oct

2 2

18.00 20.00

36 40

28

20.00

560

Problem 4 - LIFO

DATE 1-Oct 8-Oct

QTY.

PURCHASES UNIT COST

TOTAL COST

COST OF MERCHANDISE SOLD UNIT TOTAL QTY. COST COST

INVENTORY BALANCE UNIT TOTAL QTY. COST COST 50 15.00 750 50 20 15.00 18.00 15.00 18.00 750 360 750 36

20

18.00

360

11-Oct

18

18.00

324

50 2

17-Oct

2 48 30 20.00 600

18.00 15.00

36 720

2 2 30

15.00 15.00 20.00 15.00 20.00

30 30 600 30 520

21-Oct

29-Oct

4

20.00

80

2 26

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