1460T_c03.qxd11/18/0508:34 am Page112 EQA 112.Chapter 3 The Accounting Information System Instructions (a)Prepare an income statement and a statement of retained earnings for the year ending December 31,2007,and an unclassified balance sheet at December 31. (b)Answer the following questions. (1)If the note has been outstanding 6 months,what is the annual interest rate on that note? (2)If the company paid $17,500 in salaries in 2007,what was the balance in Salaries Payable on December 31,2006? (L0 7)E3-13 (Closing Entries)The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year,October 31,2007:Sales $800,000,Freight-out $12,000,Sales Returns and Allowances $24,000,and Sales Discounts $15,000. Instructions (a)Prepare the sales revenue section of the income statement. (b)Prepare separate closing entries for(1)sales and (2)the contra accounts to sales. (L0 7)E3-14 (Closing Entries)Presented below is information related to Gonzales Corporation for the month of January 2007. Cost of goods sold $208,000 Salary expense $61,000 Freight-out 7.000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Rent expense 20,000 Sales 350,000 Instructions Prepare the necessary closing entries. (L0 8)E3-15 (Missing Amounts)Presented below is financial information for two different companies. Alatorre Eduardo Company Company Sales $90.000 (d) Sales returns (a) $5.000 Net sales 81,000 95,000 56,000 ⊕ Cost of goods sold (e) Gross profit (b) 38.000 Operating expenses 15.000 23.000 Net income (c) 15.000 Instructions Compute the missing amounts. (L0 8)E3-16 (Find Missing Amounts-Periodic Inventory)Financial information is presented below for four different companies. Pamela's Dean's Anderson Baywatch Cosmetics Grocery Wholesalers Supply Co. Sales $78,000 (c) $144,000 $100,000 Sales returns (a) $5,000 12,000 9,000 Net sales 74,000 94,000 132,000 (g) Beginning inventory 16,000 (d) 44,000 24,000 Purchases 88,000 100.000 (e) 85,000 Purchase returns 6,000 10,000 8,000 (h) Ending inventory 48.000 30,000 28,000 Cost of goods sold 64,000 72,000 (⑤ 72,000 Gross profit 10,000 22,000 18,000 Instructions Determine the missing amounts (a-i).Show all computations (L0 8)E3-17 (Cost of Goods Sold Section-Periodic Inventory)The trial balance of the Neville Mariner Com- pany at the end of its fiscal year,August 31,2007,includes the following accounts:Merchandise Inventory $17,500;Purchases $149,400;Sales $200,000;Freight-in $4,000;Sales Returns and Allowances $4,000;Freight- out $1,000;and Purchase Returns and Allowances $2,000.The ending merchandise inventory is $25,000. Instructions Prepare a cost of goods sold section for the year ending August 31. (L0 7)E3-18 (Closing Entries for a Corporation)Presented on the next page are selected account balances for Homer Winslow Co.as of December 31,2007.112 • Chapter 3 The Accounting Information System Instructions (a) Prepare an income statement and a statement of retained earnings for the year ending December 31, 2007, and an unclassified balance sheet at December 31. (b) Answer the following questions. (1) If the note has been outstanding 6 months, what is the annual interest rate on that note? (2) If the company paid $17,500 in salaries in 2007, what was the balance in Salaries Payable on December 31, 2006? E3-13 (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2007: Sales $800,000, Freight-out $12,000, Sales Returns and Allowances $24,000, and Sales Discounts $15,000. Instructions (a) Prepare the sales revenue section of the income statement. (b) Prepare separate closing entries for (1) sales and (2) the contra accounts to sales. E3-14 (Closing Entries) Presented below is information related to Gonzales Corporation for the month of January 2007. Cost of goods sold $208,000 Salary expense $ 61,000 Freight-out 7,000 Sales discounts 8,000 Insurance expense 12,000 Sales returns and allowances 13,000 Rent expense 20,000 Sales 350,000 Instructions Prepare the necessary closing entries. E3-15 (Missing Amounts) Presented below is financial information for two different companies. Alatorre Eduardo Company Company Sales $90,000 (d) Sales returns (a) $ 5,000 Net sales 81,000 95,000 Cost of goods sold 56,000 (e) Gross profit (b) 38,000 Operating expenses 15,000 23,000 Net income (c) 15,000 Instructions Compute the missing amounts. E3-16 (Find Missing Amounts—Periodic Inventory) Financial information is presented below for four different companies. Pamela’s Dean’s Anderson Baywatch Cosmetics Grocery Wholesalers Supply Co. Sales $78,000 (c) $144,000 $100,000 Sales returns (a) $ 5,000 12,000 9,000 Net sales 74,000 94,000 132,000 (g) Beginning inventory 16,000 (d) 44,000 24,000 Purchases 88,000 100,000 (e) 85,000 Purchase returns 6,000 10,000 8,000 (h) Ending inventory (b) 48,000 30,000 28,000 Cost of goods sold 64,000 72,000 (f) 72,000 Gross profit 10,000 22,000 18,000 (i) Instructions Determine the missing amounts (a–i). Show all computations. E3-17 (Cost of Goods Sold Section—Periodic Inventory) The trial balance of the Neville Mariner Com￾pany at the end of its fiscal year, August 31, 2007, includes the following accounts: Merchandise Inventory $17,500; Purchases $149,400; Sales $200,000; Freight-in $4,000; Sales Returns and Allowances $4,000; Freight￾out $1,000; and Purchase Returns and Allowances $2,000. The ending merchandise inventory is $25,000. Instructions Prepare a cost of goods sold section for the year ending August 31. E3-18 (Closing Entries for a Corporation) Presented on the next page are selected account balances for Homer Winslow Co. as of December 31, 2007. (L0 7) (L0 7) (L0 8) (L0 8) (L0 8) (L0 7) 1460T_c03.qxd 11/18/05 08:34 am Page 112