Complete the following requirements using the information provided. Use the proper format to record entries and prepare statements The Lightening Shop opened January 1, 2020 and reported the following transactions: Jan 1 Purchased 20,000 Umbrellas on account for $12.50 each Jan 15 Purchased 25,000 umbrellas on account for $12.75 each Jan 20 Sold on account 33,000 umbrellas for $18.25 each Jan 23 Purchased 10,000 umbrellas on account for $12.85each Jan 25 Paid for the purchases made on Jan 1 Jan 27 Collected $ 125,000 from customers on account Jan 30 Telephone bill arrived for $550 due on Feb 15 and paid salaries of $11,000 The company uses the perpetual inventory method and pays 35% income tax. Requirements: 1. Compute the company's gross profit percentage and the inventory turnover for the month. How does this company compare with the industy average of 25% for the gross profit and an inventory turnover of 2.3 times? Round to one decimal place. 2 Assume instead that the company uses the weighted average method to value inventory. Calculate the cost of goods sold and the ending inventory value.
Complete the following requirements using the information provided.
Use the proper format to record entries and prepare statements
The Lightening Shop opened January 1, 2020
and reported the following transactions:
Jan 1 Purchased 20,000 Umbrellas on account for $12.50 each
Jan 15 Purchased 25,000 umbrellas on account for $12.75 each
Jan 20 Sold on account 33,000 umbrellas for $18.25 each
Jan 23 Purchased 10,000 umbrellas on account for $12.85each
Jan 25 Paid for the purchases made on Jan 1
Jan 27 Collected $ 125,000 from customers on account
Jan 30 Telephone bill arrived for $550 due on Feb 15 and paid salaries of $11,000
The company uses the perpetual inventory method and pays 35% income tax.
Requirements:
1. Compute the company's gross profit percentage and the
inventory turnover for the month. How does this company
compare with the industy average of 25% for the gross profit
and an inventory turnover of 2.3 times? Round to one decimal place.
2 Assume instead that the company uses the weighted average method
to value inventory. Calculate the cost of goods sold and the
ending inventory value.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
