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Academy Sales Company (ASC) started the Year 2 accounting period with.pdf
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Academy Sales Company (ASC) started the Year 2 accounting period with.pdf

  1. Academy Sales Company (ASC) started the Year 2 accounting period with the balances given in the financial statements model shown as follows. During Year 2, ASC experienced the following business events: 1. Purchased $31 , 000 of merchandise inventory on account, terms 2/10 , n /30 . 2. The goods that were purchased in Event 1 were delivered FOB shipping point. Freight costs of $750 were paid in cash by the responsible party. 3. Returned $500 of goods purchased in Event 1 . 4. (a) Recorded the cash discount on the goods purchased in Event 1. (b) Pajd the balance due on the account payable within the discount period. 5. (a) Recognized $38 , 000 of cash revenue from the sale of merchandise. (b) Recognized $30 , 000 of cost of goods sold. 6. The merchandise in Event 5 a was sold to customers FOB destination. Freight costs of $1 , 100 were poid in cash by the responsible party. 7. Paid cash of $5 , 500 for selling and administrative expenses. 8. Sold the land for $11 , 600 cash. Required a. Record these transactions in a financial statements model. b. Prepare a schedule of cost of goods soid (Appendix). c. Prepare a mulistep income statement include common size percentages on the income statement. d. ASC's gross margin percentage in Yeor 1 was 20 percent. Based on the common size data in the income statement, did ASC raise or lower its prices in Yoat 2 (Appendix)? e. Assuming a 10 percent rate of growth, what is the amount of net income expected for Year 3 ? ACADEMY SALES COMPANY Schedule of Cost of Goods Sold For the Period Ended December 31, Year 2 ACADEMY SALES COMPANY Income Statement Record these transactions in a financial statements model. Prepare a schedule of cost of goods sold (Appendix). Prepare a multistep income statement. Inclde common size percentages on the income statement. 1. ASC's gross margin percentage in Year 1 was 20 percent. Based on the common size data in the income statement, did ASC ower its prices in Year 2 (Appendix)? . Assuming a 10 percent rate of growth, what is the amount of net income expected for Year 3 ? Complete this question by entering your answers in the tabs below. d. ASC's gross margin percentage in Year 1 was 20 percent. Based on the common size data in the income staternent, did ASC ralse or lower its prices in Year 2 (Appendix)? e. Assuming a 10 percent rate of growth, what is the amount of net income expected for Year 3 ?
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