At the beginning of the current season on December 1, the ledger of Rainbow Store showed Cash $31,850, Inventory $52,550, and Share Capital—Ordinary $84,400. At the end of fiscal year December 31, 2020, these accounts appeared in its adjusted trial balance.
Account receivable $75,500
Purchases 435,500
Purchase Discounts 7,650
Purchase Returns and Allowances 3,450
Freight-In 17,500
Account Payable 65,000
Sales Revenue 985,000
Sales Returns and Allowances 21,500
Sales Discount 14,250
Freight-out 7,450
Supplies expenses 7,600
Rent expenses 18,500
Salaries and Wages Expense 36,000
Advertising Expense 24,400
Utilities Expense 14,200
Maintenance and Repairs Expense 12,100
Interest expenses 4,500
Additional facts:
1. Merchandise inventory on December 31, 2020, is $64,600.
REQUIRED
1. Calculate Cost of Goods sold for December 31, 2020.
2. Prepare an income statement through gross profit for the year ended December 31, 2020.
