Toys “R” Us sells a variety of children’s toys, games, books, and accessories. Assume that a local store has the following amounts for the month of March 2021.Sales revenue $77,300 Inventory (Mar. 31, 2021) $1,000 Advertising expense 6,400 Insurance expense 2,300 Rent expense 4,300 Sales discounts 3,000 Gain on sale of building 7,500 Salaries expense 9,400 Inventory (Mar. 1, 2021) 2,800 Income tax expense 4,200 Cost of goods sold 35,800Required: 1. Prepare a multiple-step income statement for the month ended March 31, 2021. 2. Calculate the inventory turnover ratio for the month of March. Would you expect this ratio to be higher or lower in December 2021? Explain. 3. Calculate the gross profit ratio for the month of March.
Toys “R” Us sells a variety of children’s toys, games, books, and accessories. Assume that a local store has the following amounts for the month of March 2021.
Sales revenue $77,300 Inventory (Mar. 31, 2021) $1,000
Advertising expense 6,400 Insurance expense 2,300
Rent expense 4,300 Sales discounts 3,000
Gain on sale of building 7,500 Salaries expense 9,400
Inventory (Mar. 1, 2021) 2,800 Income tax expense 4,200
Cost of goods sold 35,800
Required:
1. Prepare a multiple-step income statement for the month ended March 31, 2021.
2. Calculate the inventory turnover ratio for the month of March. Would you expect this ratio to be higher or lower in December 2021? Explain.
3. Calculate the gross profit ratio for the month of March.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
