Anyone here good at accounting? I can't figure out this assignment...

[SpringChickens]

Your credits should be larger than your debits, otherwise your business is in the hole!! Your gross profit is $440,000 and your net profit is 440,000 MINUS 294,000 = 146,000

 

[chicken_china_mom]

Quote:
Ok, I'm more confused than ever now, lol. First, flocker said to put sales in the credit column. The sales in the largest number. I'm confused on that though, because isn't sales income, and shouldn't it go in the debit column?

Second, am I separating the Euros, or just amassing it all together for the sake of the assignment. The teacher doesn't want us to convert the Euros.

 

[SpringChickens]

You can think of credit and debit this way; credit is an asset - any time people are GIVING you money or saving you money, it is a credit. Debit is a DEBT- this is when you are giving away your hard earned money.

SO, sales income is a credit - people are giving it to you.

If your teacher doesn't want you to convert the Euros, I would put them in separately (i.e. Credits = X dollars, Y euros).

Does that help?

 

[chicken_china_mom]

Quote:
Okay, so I have my columns backwards? That's what I get for only having my evenings to work on this, lol, I get tired and confused!

So let me see if I have this right, tell me if I have this right:

Assets Column2 Liabilities Column4
Purchases £250.000 Purchase Returns $7,000
Sales Discounts $4,000 Sales $400,000
Inventory Purchase Discounts $3,000
December 31, 20X1 $20,000 Owner's Equity $30,000
December 31, 20X2 $30,000
Administrative Expenses $20,000
Freight In £8,000.00
Cash $10,000


What exactly is a sales or purchase discount? Wouldn't those be liabilities?

 

[chicken_china_mom]

That is what I got written down last night. But I think that now I have the columns backwards, I think I confused the words credit and debit. The way you explained it, it made sense. Let me swap the columns and see if the company comes out ahead...

 

[greathorse]

I have a headache. Congrats for asking for help and congrats for those helping. I have been accountable for P&L all my life but couldnt put together a good one to save myself.

Good luck to all.

 

[chicken_china_mom]

Ok, this is what my Excel page looks like now:


Assets Column2 Liabilities Column4
Purchases £250.000 Purchase Returns $7,000
Sales $400,000 Administrative Expenses $20,000
Inventory Purchase Discounts $3,000
December 31, 20X1 $20,000 Owner's Equity $30,000
December 31, 20X2 $30,000 Sales Discounts $4,000
Administrative Expenses $20,000
Freight In £8,000.00
Cash $10,000


Assets column equals $440,000 American, and £258,000 Euros

Liabilities column equals $64,000 American, no Euros. Does this look right thus far?

 

[FarmerJamie]

Quote:
Oh heavens, I'm with you, greathorse. Three semesters of accounting, plus another for cost accounting, and years of project financial reporting, I thought I'd jump in. Then reality set in and I tried not to keeping reading, you BYCers rock! My head starting spinning after the first page of entries.

 

[SpringChickens]

I think you're getting there. I just think that purchase should be a liability (because you gave someone else money) - so your purchase discounts would be an asset. You have administrative expenses on there twice (once in each column), but it should be a debit. Other than that, it looks good to me. Good luck!

 

[chicken_china_mom]

Quote:
Oh heavens, I'm with you, greathorse. Three semesters of accounting, plus another for cost accounting, and years of project financial reporting, I thought I'd jump in. Then reality set in and I tried not to keeping reading, you BYCers rock! My head starting spinning after the first page of entries.

That's me in this whole course!!! I hate it!