Week 6 Individual
Estimating Inventory and Preparing Multiple-Step and Single-Step Income Statements

Assignment Guidelines:

Problem 5-4A

**Please see assignment in text on pg. 212 for complete directions.

1. Compute the company’s net sales for the year.
2. Compute the company’s total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.

Part 1 Net Sales $212.00 | Sales Discount ($3,250) | Sales Returns ($14,000) | Net Sales $94,750 | | | | |

Part 2 - Invoice Cost of Merchandise Purchased $91,000 | Discounts Received ($1,900) | Purchase Returns and Allowances ($4,400) | Costs of Transportation-in $3,900 | Total Cost of Merchandise Purchased $88,600 | | | |

Part 3 BizKid Company | Income Statement | Year Ended August 31, 2005 | | Sales $212,000 | Less Sales Discounts $3,250 | Sales Return & Allowances $14,000 ($17,250) | Net Sales $194,750 | Costs of Goods Sold ($82,600) | Gross Profit