Homework answers / question archive / 1)  Sales Cost of Operating Non—operating Income Tax Company Revenue Goods Sold Expenses Expenses Expense Henry $16,000 $ 3,200 $4,200 $1,200 $1,200 Grace 19,000 12,350 7,200 3,200 0 James 24,000 13,680 2,200 0 2,200  Exercise 6-16A Part 2  2-a

1)  Sales Cost of Operating Non—operating Income Tax Company Revenue Goods Sold Expenses Expenses Expense Henry $16,000 $ 3,200 $4,200 $1,200 $1,200 Grace 19,000 12,350 7,200 3,200 0 James 24,000 13,680 2,200 0 2,200  Exercise 6-16A Part 2  2-a

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1) 

Sales Cost of Operating Non—operating Income Tax Company Revenue Goods Sold Expenses Expenses Expense Henry $16,000 $ 3,200 $4,200 $1,200 $1,200 Grace 19,000 12,350 7,200 3,200 0 James 24,000 13,680 2,200 0 2,200 
Exercise 6-16A Part 2 
2-a. For each company, calculate the gross profit ratio. 
Henry 
Gross Profit Ratio 
Grace 

James 
2-b. Which company has the most favorable ratio? 

2)

Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,074 and No. 5893 for $495. Check No. 5893 was still outstanding as of September 30. The following information is available for its September 30 reconciliation. 
From the September 30 Bank Statement 
PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE ] 
20,000 9,845 11,796 21,951 CHECKS AND DEBITS Date No. Amount DEPOSITS AND CREDITS Date Amount 09/03 5888 1,074 09/05 1,116 09/04 5902 748 09/12 2,291 09/07 5901 1,847 09/21 4,312 09/17 644 NSF 09/25 2,381 09/20 5905 903 09/30 16 IN 09/22 5903 410 09/30 1,680 CM 09/22 5904 2,062 09/28 5907 267 09/29 5909 1,890 
From Chavez Company's Accounting Records 
Cash Receipts Deposited Cash Date Debit 
Sept. 5 12 21 25 30 
1,116 2,291 4,312 2,381 1,749 
11,849 
Cash Check No. Payments Cash Credit 5901 1,847 5902 748 5903 410 5904 2,023 5905 903 5906 1,048 5907 267 5908 378 5909 1,890 9,514 
Acct. No. 101 Debit Credit Balance 
Cash Date Explanation PR 
Aug. 31 Balance Sept. 30 Total receipts 30 Total payments 
R12 
D23 
11,849 
18,431 30,280 9,514 20,766 
Additional Information 
(a) Check No. 5904 is correctly drawn for $2,062 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,023. (b) The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account Its return has not yet been recorded by the company. (c) The credit memorandum (CM) is from the collection of a $1,680 note for Chavez Company by the bank. The collection is not yet recorded. 
Required: 
1. Prepare the September 30 bank reconciliation for this company.