Problem 25.01ANew2UIncome StatementYear Ended December 31 2013DepartmentADepartmentBTotalOperating RevenuesNet SalesCost of Goods SoldDelivered Cost of PurchasesNet Delivered Cost of PurchasesTotal Merchandise Available for SaleCost of Goods SoldGross Profit on SalesOperating ExpensesDirect ExpensesTotal Direct ExpensesContribution MarginIndirect ExpensesTotal Indirect ExpensesNet Income from OperationsOther IncomeOther ExpenseNet Income for the YearALLOCATION OF INDIRECT EXPENSESDepartment ADepartment BInsurance ExpenseProportion of gross assetsbefore depreciation andInsuranceending inventoryExpenseXXDepartmentAllocation==Rent ExpenseProportion of floorspace occupiedDepartment ADepartment BRentExpenseXXDepartmentAllocation==Utilities ExpenseProportion of floorspace occupiedDepartment ADepartment BDepartment ADepartment BUtilitiesExpenseXXDepartmentAllocation==Office Salaries ExpenseOfficeProportion of totalSalariesgross salesExpenseXXDepartmentAllocation==Other Office ExpensesOtherOfficeExpensesProportion of totalgross salesDepartment ADepartment BXXDepartmentAllocation==Department ADepartment BDepreciation Expense – Office EquipmentDepreciationProportion of totalExpenseDepartmentgross salesOff. Equip.AllocationX=X=Department ADepartment BUncollectible Accounts ExpenseUncollectibleProportion of totalAccountsDepartmentnet salesExpenseAllocationX=X=Department ADepartment BDepreciation Expense – Furniture and FixturesDepreciationProportion of cost ofExpenseDepartmentfurniture and fixturesFurn. & Fixt.AllocationX=X=Given Data P25.01ANew2UAdjusted Trial BalanceSelected InformationDecember 31 2013Merchandise Inventory Jan. 1Merchandise Inventory Dec. 31SalesSales Returns and AllowancesPurchasesFreight InPurchases Returns and AllowancesSales Salaries ExpenseAdvertising ExpenseStore Supplies ExpenseCash Short or OverInsurance ExpenseRent ExpenseUtilities ExpenseOffice Salaries ExpenseOther Office ExpenseUncollectible Accounts ExpenseDepreciation Expense – Furniture & FixturesDepreciation Expense – Office EquipmentInterest IncomeInterest ExpenseDepartmentA$45 00041 000536 2504 200200 0005001 500100 00015 00066040DepartmentB$15 00011 000288 7502 800115 00050050050 0005 0002080Total$60 00052 000825 0007 000315 0001 0002 000150 00020 00068012015 00036 0006 00040 0001 4005 0006 000500300500Allocation Information1. Insurance Expense: In proportion to the total of furniture and fixtures and the ending inventoryin the departments.Department A130 000Department B70 000Totals200 0002. Rent Expense and Utilities Expense: On the basis of floor space occupied as follows:Department ADepartment BTotals4 500 square feet1 500 square feet6 000 square feet3. Office Salaries Expense Other Office Expenses and Depreciation Expense-Office Equipment:on the basis of the gross sales in each department.4. Uncollectible Accounts Expense: on the basis of net sales in each department.5. Depreciation Expense – Furniture and Fixtures: in proportion to cost of furniture and fixtures in eachdepartment. (Round to nearest dollar)Department A30 000Department B20 000Totals50 000Student Name:Class:Problem 25.02AYARD SHOPIncome StatementYear Ended December 31 2013PlantsNet SalesCost of Goods SoldNet PurchasesCost of Goods Available for SaleCost of Goods SoldGross ProfitContribution MarginNet Income (Loss) from OperationsNet SalesPercent of Total Net SalesTimes Total Indirect ExpensesAllocation of Indirect ExpensesContribution MarginIndirect ExpensesNet Income (Loss) from OperationsChemicalsToolsTotalGiven Data P25.02AYARD SHOPSelected InformationDecember 31 2013Allocated indirect expensesBeginning merchandise inventoryDirect ExpensesEnding merchandise inventoryPurchasesPurchases returns and allowancesSalesSales returns and allowancesPlants$9 6002 60030 0002 50050 000500126 7501 750Chemicals$5 4002 60017 5002 40047 00040075 500500Tools$5 0002 90015 5002 00036 00030050 400400
