Question

Hendry’s Boutique is a retail clothing store for women. The store operates out of a rented building in Storm Lake, Iowa. The following is the store’s adjusted year-end trial balance dated December 31, current year. HENDRY'S BOUTIQUE Adjusted Trial Balance December 31, current year Cash $ 19,590 Accounts receivable 3,480 Merchandise inventory 25,500 Prepaid rent 2,610 Office supplies 1,620 Office equipment 51,900 Accumulated depreciation: office equipment $ 15,300 Accounts payable 16,200 Sales taxes payable 4,020 Capital stock 23,400 Retained earnings 33,500 Sales 291,000 Sales returns and allowances 3,000 Cost of goods sold 135,360 Purchase discounts lost 750 Utilities expense 6,042 Office supply expense 912 Depreciation expense: office equipment 4,200 Rent expense 7,860 Insurance expense 1,310 Salaries expense 108,360 Income taxes expense 10,926 $ 383,420 $ 383,420 Required:

a. Prepare an income statement for Hendry’s Boutique dated December 31, current year.

b. Compute the store’s gross profit margin as a percentage of net sales.

c. Do the store’s customers seem to be satisfied with their purchases? multiple choice Yes No

f. Which accounts appearing in the store’s adjusted trial balance comprise its operating cycle? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.

Any boxes left with a question mark will be automatically graded as incorrect.) check all that apply

Answer 1