please see below per writing instructions:
1). Describe the 2 formats for the income statement of a merchandising company, and list the respective sub-totals found in each income statement format. (You should describe some of the accounts found on each type of income statement).
2). a) Describe purchase discounts and purchase returns & allowances.
b) Describe the 2 shipping terms methods companies use when delivering products, and how freight costs are accounted for.
3). Sales on Account – Many sales are made on account (on credit) instead of with cash or a credit card. Assume that your new company purchases products for resell to customers, and your plan is to sell those products at a profit. Make the appropriate journal entries to record the sale (on account – ie., on credit) assuming your company sells 4 of those products to a single customer. (You should select any price you wish to pay to your vendor for the purchase). Hint – There will be 2 entries…Be sure to include both the sale to the customer, as well as the impact of the reduction of inventory through cost of goods sold.
please use the following quote within the paper:
“A multi-step income statement is different than a single-step income statement because it lists several important subtotals. In addition to net income (the bottom line), it also reports subtotals for gross profit, operating income (also called income from operations), and income before income tax expense.”
Reference:
Matsumura, T.M.B.M.E. M. (2017). Horngren’s Financial & Managerial Accounting. [Bookshelf]. Retrieved from https://full-bookshelf.vitalsource.com/#/books/9780134491646/
* The book is not required to complete writing assignment.
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