Presented Below Is Information for Annie Company for the Month

question 197

Essay

Presented below is information for Annie Company for the month of March 2018. $$\begin{array} { l r l r } \text { Cost of goods sold } & \$ 245,000 & \text { Rent expense } & \$ 36,000 \\\text { Freight-out } & 7,000 & \text { Sales discounts } & 8,000 \\\text { Insurance expense } & 5,000 & \text { Sales returns and allowances } & 11,000 \\\text { Salaries and wages expense } & 63,000 & \text { Sales revenue } & 410,000\end{array}$$ Instructions
(a) Prepare a multiple -step income statement.
(b) Compute the gross profit rate.

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Definitions:

Cash Payments Journal

An accounting ledger used to record all cash payments made by a business, excluding cash payments to creditors.

Purchase Supplies

The act of acquiring goods or materials used in the production process or in the day-to-day operations of a company.

Cash Recorded

The accounting entry that reflects the actual amount of cash received and recorded by a business during a specific period.

Revenue Journal

A revenue journal is a record used in accounting to keep track of the sales of goods and services that generate revenue for an entity.