Question
The following items are taken from the financial statements of Butler Company for 2012:
Accounts Receivable
$20,000
Cost of Goods Sold
95,000
Utilities Expense
3,500
Accounts Payable
7,000
Common Stock
100,000
Rent Expense
5,500
Advertising Expense
9,000
Dividends
10,000
Insurance Expense
2,000
Note Payable (due 2014)
50,000
Depreciation Expense
10,000
Prepaid Insurance
18,000
Accumulated Depreciation
30,000
Retained Earnings (beginning)
33,000
Salaries Expense
40,000
Salaries Payable
4,500
Net sales
170,000
Supplies
3,000
Supplies Expense
2,500
Instructions
(a) Calculate the net income. (18 points)
(b) Calculate the balance of Retained Earnings that would appear on a Balance Sheet at December 31, 2012. (7 points)
(c) Calculate the gross profit percentage
|
Accounts Receivable |
$20,000 |
|
Cost of Goods Sold |
95,000 |
|
Utilities Expense |
3,500 |
|
Accounts Payable |
7,000 |
|
Common Stock |
100,000 |
|
Rent Expense |
5,500 |
|
Advertising Expense |
9,000 |
|
Dividends |
10,000 |
|
Insurance Expense |
2,000 |
|
Note Payable (due 2014) |
50,000 |
|
Depreciation Expense |
10,000 |
|
Prepaid Insurance |
18,000 |
|
Accumulated Depreciation |
30,000 |
|
Retained Earnings (beginning) |
33,000 |
|
Salaries Expense |
40,000 |
|
Salaries Payable |
4,500 |
|
Net sales |
170,000 |
|
Supplies |
3,000 |
|
Supplies Expense |
2,500 |
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