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¢ www.mathxl.com/Stu mework.aspx?homeworkld-484932566&questionlds48;/ Do hapter 5: Problems 4018(4 complete) he adjusted trial balance of Thomas Department Store at December 31, 2016, follows ep income statement for the year ended December 31, 2016. Assume ending Merchandise Inventory is $36,200 (Use a e statement in the next step. nt 31, 2016 Requirements 1. Prepare Thomas Department Store\'s multi-step income statement for the year ended December 31, 2016. Assume ending Merchandise Inventory is $36,200 2. Journalize Thomas Department Store\'s closing entries. Print Done lds and then click Check Answer Clear All

Solution

Multistep income statement

Explanation

Debit

credit

cost of goods sold

sales revenue

400000

beginning inventory

37200

less discount

4800

add net purchases = purchases-purchase return-discount

168400

less sales return

6200

add freight in

600

net sales

389000

less year end inventory

36200

less cost of goods sold

170000

cost of goods sold

170000

gross profit

219000

less operating expenses

68100

selling expense

41800

administrative expenses

26300

operating profit

150900

less interest expense

3600

net profit

147300

Multistep income statement
Explanation	Debit	credit		cost of goods sold
sales revenue	400000			beginning inventory	37200
less discount	4800			add net purchases = purchases-purchase return-discount	168400
less sales return	6200			add freight in	600
net sales		389000		less year end inventory	36200
less cost of goods sold		170000		cost of goods sold	170000
gross profit		219000
less operating expenses		68100
selling expense	41800
administrative expenses	26300
operating profit		150900
less interest expense		3600
net profit		147300