# FINANCE

Brief Exercise 5-1
Presented here are the components in Casilla Company’s income statement.
Determine the missing amounts.
Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Net Income

Brief Exercise 5-8
Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases \$404,000; Purchase Returns and
Allowances \$13,000; Purchase Discounts \$9,000; and Freight-in \$16,000.
Determine net purchases and cost of goods purchased.
Net purchases \$
Cost of goods purchased \$

Brief Exercise 5-9
Assume that Tracy Company uses a periodic inventory system and has these account balances: Purchases \$404,000; Purchase Returns and
Allowances \$13,000; Purchase Discounts \$9,000; and Freight-in \$16,000. Tracy Company has beginning inventory of \$60,000, ending
inventory of \$90,000, and net sales of \$612,000.
Determine the amounts to be reported for cost of goods sold and gross profit.
Cost of goods sold \$
Gross profit \$

Brief Exercise 5-10
Durbin Corporation reported net sales of \$250,000, cost of goods sold of \$150,000, operating expenses of \$50,000, net income of \$32,500,
beginning total assets of \$520,000, and ending total assets of \$600,000.
Calculate profit margin and gross profit rate. (Round answers to 0 decimal places, e.g. 10%.)
Profit margin %
Gross profit rate %

Exercise 5-6 (Part Level Submission)
Presented below is information for Zhou Co. for the month of January 2014.
Cost of goods sold \$212,000 Rent expense \$32,000
Freight-out 7,000 Sales discounts 8,000
Insurance expense 12,000 Sales returns and allowances 20,000
Salaries and wages expense 60,000 Sales revenue 370,000
(a)
Prepare an income statement using the multi-step format. Assume a 25% tax rate.

(b)
Calculate the profit margin and the gross profit rate. (Round answers to 1 decimal place, e.g. 15.2%.)

 Problem 5-2A McCoy Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurred. June 1 Purchased books on account for \$1,040 (including freight) from Carlin Publishers, terms 2/10, n/30. 3 Sold books on account to the Goldschmidt bookstore for \$1,200. The cost of the merchandise sold was \$720. 6 Received \$40 credit for books returned to Carlin Publishers. 9 Paid Carlin Publishers in full. 15 Received payment in full from the Goldschmidt bookstore. 17 Sold books on account to Town Crier for \$1,200. The cost of the merchandise sold was \$730. 20 Purchased books on account for \$720 from Good Book Publishers, terms 1/15, n/30. 24 Received payment in full from Town Crier.

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