Accounting #5

Please complete all tabs at the bottom of the work sheet. I need it by Saturday morning. 02/09/13.

E-25-1A

Gross Profit Section of Departmental Income Statement Bill. Walter and Alice Jennings are partners in a business called Walters and Jennings Sportswear that sells athletic footwear. They have organized the business on a department basis as follows: running shoes, walking shoes, and specialty shoes. At the end of the first year of operation, the sales and cost of goods sold for the three departments are as follows:

Running Shoes Walking Shoes Specialty Shoes

Sales $36,000 $42,000 $12,000

Cost of goods sold 23,400 23,520 7,600

Prepare the gross profit section of a department income statement for the year ended December 31, 20-. Show the gross profit for each department and for the business in total.

P 25-9A

Income Statement With Departmental Direct Operating Margin and Total Operating Income. Durwood Thomas operates the Business Thomas Security that sells security equipment for commercial property and residential homes. The following information is provided for the year ended December 31, 20-.

Commercial Residential

Property Homes

Net sales $465,000 $135,000

Cost of goods sold 279,250 54,000

Direct operating expenses:

Advertising expense 35,000 20,000

Store clerk’s wages expense 30,000 18,000

Truck drivers’ wages expense 15,000 15,000

Bad debt expense 8,000 3,000

Depreciation expense delivery equipment 6,000 4,000

Other operating expenses 20,000 10,000

Indirect operating expenses:

Store clerks’ wages expense 10,000

Advertising expense 15,000

Store rent expense 20,000

Other operating expenses 10,000

Required:

1. Prepare an income statement showing department direct operating margin and total operating income.

2. Calculate department direct operating margin percentages.

P 25-9B

Income Statement with Departmental Direct Operating Margin and Total Operating Income. Tom Peterson owns the business Peterson’s Furniture and Appliances. The following information is provided for the year ended December 31, 20-.

Furniture Appliances

Department Department

Net sales $390,000 $810,000

Cost of goods sold 234,000 405,000

Direct operating expenses:

Advertising expense 30,000 60,000

Store clerks’ expense 40,000 90,000

Truck drivers’ wages expense 35,000 65,000

Depreciation expense delivery equipment 4,000 8,000

Bad Debt expense 4,000 9,000

Other operating expenses 15,000 50,000

Indirect operating expenses:

Store clerks’ wages expense $20,000

Advertising expense 15,000

Store rent expense 50,000

Other operating expenses 25,000

Required:

1. Prepare an income statement showing departmental direct operating margin and total operating income.

2. Calculate departmental direct operating margin percentages.

E25-1A

E25-1A

(Partial)

Walters and Jennings Sportswear

Departmental

Income Statement

For the Year Ended December 31, 20–

Running Shoes Dept.

Walking Shoes Dept.

Specialty Shoes Dept.

Total

Sales

Cost of goods sold

Gross profit

P25-9A

Income Statement

For the Year Ended December 31, 20–

Property

Homes

Total

Cost of goods sold
Gross profit

Store clerks’ wages expense
Advertising expense

Other operating expenses
Total direct operating expenses

Departmental direct operating margin
Commercial
Residential

Problem 25-9A		Name:
	1.
Thomas Security
	Commercial		Residential
	Net sales
	Direct operating expenses:
			Advertising expense
			Store clerks’ wages expense
	Truck drivers’ wages expense
	Bad debt expense
	Depr. Exp. – delivery equipment
			Other operating expenses
			Total direct operating expenses
			Departmental direct operating margin
	Indirect operating expenses:
	Store rent expense
	Operating income
	2.
	Direct Operating Margin		Net Sales		Direct Operating Margin Percentage
	percentages:

P25-9B

Name:

1.

Income Statement
For the Year Ended December 31, 20–

Total

Net sales
Cost of goods sold
Gross profit
Direct operating expenses:
Advertising expense
Store clerks’ wages expense
Truck drivers’ wages expense
Bad debt expense
Depr. Exp. – delivery equipment
Other operating expenses
Total direct operating expenses
Departmental direct operating margin
Indirect operating expenses:
Store clerks’ wages expense
Advertising expense
Store rent expense
Other operating expenses
Total direct operating expenses
Operating income

2.
Direct
Operating
Margin Net Sales Direct Operating Margin Percentage

Departmental direct operating margin
percentages:

Furniture Department
Appliances Department

Problem 25-9B
Peterson’s Furniture and Appliances
	Furniture Department		Appliances Department

Grading Rubric

10 points

10 points

*requirement 1 7 points
*requirement 2 3 points

at 3 points each and 2 reports at 2 points each. The Account Listing,

reports

Week 5 Grading Rubric
Point Available	Points Earned
E25-1A Total			10 points
P25-9A Total
	*requirement 1		7 points
	*requirement 2		3 points
P25-9B Total
QuickBooks Reports 10 points
2	reports
Trial Balance, P&L, and the Balance Sheet. The
Journal and the Transaction Detail by Account