03.07.2022 - 11:05

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 20

Question:

Good to Go Auto Products distributes automobile parts to service stations and repair shops. The adjusted trial balance data that follows is from the firm’s worksheet for the year ended December 31, 2019.

Accounts Debit Credit
Cash $ 97,500
Petty Cash Fund 500
Notes Receivable, due 2020 17,500
Accounts Receivable 138,700
Allowance for Doubtful Accounts $ 2,300
Interest Receivable 175
Merchandise Inventory 127,000
Warehouse Supplies 1,800
Office Supplies 550
Prepaid Insurance 3,140
Land 14,500
Building 99,500
Accumulated Depreciation-Building 15,950
Warehouse Equipment 18,300
Accumulated Depreciation-Warehouse Equipment 8,750
Office Equipment 7,900
Accumulated Depreciation-Office Equipment 3,150
Notes Payable, due 2020 13,500
Accounts Payable 55,400
Interest Payable 250
Loans Payable-Long-Term 9,500
Mortgage Payable 12,500
Colin O’Brien, Capital (Jan. 1) 322,245
Colin O’Brien, Drawing 69,150
Income Summary 129,900 127,000
Sales 1,080,300
Sales Returns and Allowances 6,900
Interest Income 430
Purchases 448,000
Freight In 8,300
Purchases Returns and Allowances 12,150
Purchases Discounts 7,740
Warehouse Wages Expense 107,100
Warehouse Supplies Expense 4,300
Depreciation Expense-Warehouse Equipment 1,900
Salaries Expense-Sales 150,200
Travel Expense 22,500
Delivery Expense 35,925
Salaries Expense-Office 83,500
Office Supplies Expense 1,070
Insurance Expense 8,375
Utilities Expense 6,500
Telephone Expense 3,130
Payroll Taxes Expense 30,100
Building Repairs Expense 2,200
Property Taxes Expense 14,900
Uncollectible Accounts Expense 2,080
Depreciation Expense-Building 4,100
Depreciation Expense-Office Equipment 1,470
Interest Expense 2,500
Totals $ 1,671,165 $ 1,671,165

Required:

Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.

Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.

Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than one year.

Analyze:

What percentage of total operating expenses is attributable to warehouse expenses?

Answers (1)
  • Elizabeth
    April 15, 2023 в 23:16
    To analyze the percentage of total operating expenses attributable to warehouse expenses, we need to first identify the warehouse expenses. From the provided data, we can see that the following accounts represent warehouse expenses: Warehouse Supplies Expense, Depreciation Expense-Warehouse Equipment, and Warehouse Wages Expense. Total operating expenses can be calculated by adding together all the expense accounts except for Cost of Goods Sold and Income Tax Expense. Doing this gives us a total of $573,830. The total of all warehouse expenses is $113,300. To find the percentage of total operating expenses attributable to warehouse expenses, we divide the total warehouse expenses by the total operating expenses and multiply by 100. ($113,300/$573,830) * 100 = 19.74% Therefore, 19.74% of the total operating expenses is attributable to warehouse expenses.
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