At the beginning of 2012, D & L Enterprises had the following balances in its...
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Accounting
At the beginning of 2012, D & L Enterprises had the following balances in its accounts: Cash $8,400 Inventory 2,000 Common stock 8,000 Retained earnings 2,400 During 2012, D & L Enterprises experienced the following events: 1. Purchased inventory costing $5,600 on account from Smoot Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $500 were paid in cash. 2. Returned $400 of the inventory that it had purchased because the inventory was damaged in transit. The freight company agreed to pay the return freight cost. 3. Paid the amount due on its account payable to Smoot Company within the cash discount period. 4. Sold inventory that had cost $6,000 for $9,000. The sale was on account under terms 2/10, n/45. 5. Received returned merchandise from a customer. The merchandise had originally cost $520 and had been sold to the customer for $840 cash. The customer was paid $840 cash for the returned merchandise. 6. Delivered goods in Event 4 FOB destination. Freight costs of $600 were paid in cash. 7. Collected the amount due on accounts receivable within the discount period. 8. Took a physical count indicating that $1,800 of inventory was on hand at the end of the accounting period.
Balance Sheet
Income Statement
Statement of
Event
No.
Cash
+
Accts. Rec.
+
Mdse. Inv.
=
Accts. Pay
+
Comm
Stock
+
Ret. Earn.
Rev.
Exp.
=
Net Inc.
Cash
Flows
Bal.
8,400
N/A
2,000
N/A
8,000
2,400
N/A
N/A
N/A
1a.
N/A
N/A
5,600
5,600
N/A
N/A
N/A
N/A
N/A
N/A
1b.
(500)
N/A
500
N/A
N/A
N/A
N/A
N/A
N/A
(500) OA
2.
N/A
N/A
(400)
(400)
N/A
N/A
N/A
N/A
N/A
N/A
3.
(5,096)
N/A
(104)
(5,200)
N/A
N/A
N/A
N/A
N/A
(5,096) OA
4a.
N/A
9,000
N/A
N/A
N/A
9,000
9,000
N/A
9,000
N/A
4b.
N/A
N/A
(6,000)
N/A
N/A
(6,000)
N/A
6,000
(6,000)
N/A
5a.
(840)
N/A
N/A
N/A
N/A
(840)
(840)
N/A
(840)
(840) OA
5b.
N/A
N/A
520
N/A
N/A
520
N/A
(520)
520
N/A
6.
(600)
N/A
N/A
N/A
N/A
(600)
N/A
600
(600)
(600) OA
7.
8,820
(9,000)
N/A
N/A
N/A
(180)
(180)
N/A
(180)
8,820 OA
8.
N/A
N/A
(316)
N/A
N/A
(316)
N/A
316
(316)
N/A
Bal.
10,184
0
1,800
0
8,000
3,984
7,980
5,796
1,584
1,784 NC
Prepare a multistep income statement. (All expenses and amounts to be deducted should be indicated with minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
D & L Enterprises Income Statement For the Year Ended December 31, 200
Net sales:
Cost of goods sold:
Gross Profit:
(Operation Expenses)
Transportation-out:
Operating Income:
D & L Enterprises Statement of Changes in Stockholders
Answer & Explanation
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