LESSON 4 4 Responsibility Statements for a Merchandising

LESSON 4 -4 Responsibility Statements for a Merchandising Business CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 4 -4

2 DEPARTMENTAL MARGIN STATEMENT—AUDIO page 111 1. Determine net sales for department. 1 2. Determine cost of merchandise sold for department. 2 3. Calculate gross profit. 3 4 5 CENTURY 21 ACCOUNTING © Thomson/South-Western 4. Record direct expenses of the department. 5. Calculate the departmental margin. LESSON 4 -4

3 COMPONENT PERCENTAGES ON DEPARTMENTAL MARGIN STATEMENTS page 112 Departmental Margin ÷ Net Sales = Component Percentage for Departmental Margin $49, 222. 61 ÷ $344, 476. 46 = 14. 3% Component Percentages 20 X 3 20 X 2 20 X 1 Departmental Margin CENTURY 21 ACCOUNTING © Thomson/South-Western 14. 3% 13. 4% 13. 1% LESSON 4 -4

4 DEPARTMENTAL MARGIN STATEMENT—VIDEO page 113 1. Determine net sales for department. 1 2. Determine cost of merchandise sold for department. 2 3. Calculate gross profit. 3 4 5 CENTURY 21 ACCOUNTING © Thomson/South-Western 4. Record direct expenses of the department. 5. Calculate the departmental margin. LESSON 4 -4

5 INCOME STATEMENT WITH DEPARTMENTAL MARGIN page 114 1. Prepare the heading. 1 2 -6. Use information from the departmental margin statements. 7 7. Use information from the Income Statement columns of the work sheet. 8. Complete the income statement. 8 9 CENTURY 21 ACCOUNTING © Thomson/South-Western 9. Calculate component percentages. LESSON 4 -4

6 STATEMENT OF STOCKHOLDERS’ EQUITY CENTURY 21 ACCOUNTING © Thomson/South-Western page 115 LESSON 4 -4

7 BALANCE SHEET CENTURY 21 ACCOUNTING © Thomson/South-Western page 116 LESSON 4 -4

8 BALANCE SHEET CENTURY 21 ACCOUNTING © Thomson/South-Western page 116 LESSON 4 -4

9 TERMS REVIEW n n n n page 117 responsibility statements income statement of stockholders’ equity capital stock retained earnings dividends balance sheet CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 4 -4