The following information applies to the questions displayed

The following information applies to the questions displayed below. Shown below is a trial balance for Novelty Toys, Inc., on December 31,after adjusting entries Novelty Toys, Inc. Trial Balance December 31 Cash Accounts Receivable Office Equipment Accumulated Depreciation Accounts Payable Capital Stock Retained Earnings Dividends Fees Earned Salaries Expense Advertising Expense Depreciation Expense $ 7,750 6, 375 11,250 S 3,000 3,875 11,250 3,750 22,750 8,000 1,625 2,125 S 40,875 S40,875 The total debits in the After-Closing Trial Balance will equal Select one O a. $25,375 O b. $29,125 O c. $40,875 d. $18,125

Solution

1) Answer : a) $25,375

     Total debits in the after – closing trial balance is = $25,375

                          = (Cash + account receivables = office equipment)

                          = (7,750+6,375+11,250)

                         =$25,375

         Total debits in the after – closing trial balance is = $25,375

2) Answer : a) 5%

    Given that :

           Sales = $600,000 ; net income = $30,000 ;

              Net income percentage = (net income / sales )*100

                                                          =(30,000/600,000)*100

                                                          = 5 %

               Net income percentage = 5%

3) Answer : a) $96,800

        Cost of goods sold = opening inventory +purchases-closing stock

                                          = 21,200+132,200-19,800

                                          = 133,600

                 Cost of goods sold = 133,600

    Gross profit =sales – cost of goods sold

                          = 230,400-133,600

                          = 96,800

          Gross profit = $96,800