On July 31, 2012, the balances of the accounts appearing in the ledger of Sagebrush Company...
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On July 31, 2012, the balances of the accounts appearing in the ledger of Sagebrush Company are as follows: $ 18,300 Sales Returns and Allowances $ 12,000 Cash Accounts Receivable 72,000 Sales Discounts 8,000 Merchandise Inventory, August 1, 2011 Office Supplies Purchases 700,000 90,000 Purchases Returns and Allowances 6,000 3,000 Purchases Discounts 4,000 Prepaid Insurance Land 4,500 Freight In 300,000 Sales Salaries Expense 30,000 300,000 Store Equipment Accumulated Depreciation- 270,000 Advertising Expense Delivery Expense 55,000 9,000 Store Equipment 55,900 Depreciation Expense- Office Equipment 78,500 Store Equipment 6,000 Miscellaneous Selling Expense Accumulated Depreciation- Office Equipment Accounts Payable Salaries Payable 10,000 16,000 Office Salaries Expense 27,800 Rent Expense 150,000 30,000 3,000 Insurance Expense 3,000 8,300 Office Supplies Expense Unearned Rent 2,000 Notes Payable Capital Stock Retained Eamings 50,000 Depreciation Expense- 80,000 275,300 Miscellaneous Administrative Expense Office Equipment 1,500 3,500 Dividends 35,000 Rent Revenue 7,000 Sales 1,660,000 Interest Expense 2,000 Instructions 1. Does Sagebrush Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Sagebrush Company for the year ended July 31, 2012. The merchandise inventory as of July 31, 2012, was $80,000. 3. Prepare the closing entries for Sagebrush Company as of July 31, 2012. 4. What would be the net income if the perpetual inventory system had been used? On July 31, 2012, the balances of the accounts appearing in the ledger of Sagebrush Company are as follows: $ 18,300 Sales Returns and Allowances $ 12,000 Cash Accounts Receivable 72,000 Sales Discounts 8,000 Merchandise Inventory, August 1, 2011 Office Supplies Purchases 700,000 90,000 Purchases Returns and Allowances 6,000 3,000 Purchases Discounts 4,000 Prepaid Insurance Land 4,500 Freight In 300,000 Sales Salaries Expense 30,000 300,000 Store Equipment Accumulated Depreciation- 270,000 Advertising Expense Delivery Expense 55,000 9,000 Store Equipment 55,900 Depreciation Expense- Office Equipment 78,500 Store Equipment 6,000 Miscellaneous Selling Expense Accumulated Depreciation- Office Equipment Accounts Payable Salaries Payable 10,000 16,000 Office Salaries Expense 27,800 Rent Expense 150,000 30,000 3,000 Insurance Expense 3,000 8,300 Office Supplies Expense Unearned Rent 2,000 Notes Payable Capital Stock Retained Eamings 50,000 Depreciation Expense- 80,000 275,300 Miscellaneous Administrative Expense Office Equipment 1,500 3,500 Dividends 35,000 Rent Revenue 7,000 Sales 1,660,000 Interest Expense 2,000 Instructions 1. Does Sagebrush Company use a periodic or perpetual inventory system? Explain. 2. Prepare a multiple-step income statement for Sagebrush Company for the year ended July 31, 2012. The merchandise inventory as of July 31, 2012, was $80,000. 3. Prepare the closing entries for Sagebrush Company as of July 31, 2012. 4. What would be the net income if the perpetual inventory system had been used?
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