50.1K

Verified Solution

Link Copied!

Good Buy purchases merchandise inventory by the crate each crate of inventory is a unit. The fiscal year of Good Buy ends each February 28. Assume you are dealing with a single Good Buy store in Whitehorse, Yukon and that the store experienced the following: The store began fiscal year 2020 with an inventory of 21.000 units that cost a total of $1,050,000. During the year, the store purchased merchandise on account as follows: (Click the icon to view the purchases.) Cash payments on account totalled $9,042,000. During fiscal year 2020, the store sold 149.000 units of merchandise for $14, 304,000. Cash accounted for $4.800,000 of this, and the balance was on account. Good Buy uses the FIFO method for inventories. Operating expenses for the year were $3,750,000. The store paid 80% in cash and accrued the rest as accrued liabilities. The store accrued income tax at the rate of 35%. Requirements Purchases - X $ 1,888,000 April (32,000 units @ cost of $59) .... August (52,000 units @ cost of $63). 3,276,000 4,278,000 November (62,000 units @ cost of $69) Total purchases. $ 9,442,000 Print Done i Requirements 1. Make summary journal entries to record the store's transactions for the year ended February 28, 2020. Good Buy uses a perpetual inventory system. 2. Prepare a T-account to show the activity in the Inventory account. 3. Prepare the store's income statement for the year ended February 28, 2020. Show totals for gross profit, income before tax, and net income. 4. Compute the gross profit percentage. How does this compare with last year's gross profit percentage of 37%? What are some possible reasons for the change? Print Done Requirement 4. Compute the gross profit percentage. How does this compare with last year's gross profit percentage of 37%? What are some possible reasons for the change? (Enter the gross profit as a percentage rounded to one decimal place, X.X.) The gross profit percentage is 1% last year's percentage of 37%. Possible causes This year's gross profit percentage is could be that inventory is exactly the same as higher than Choose from any list or enter any nu then continue to the next question. lower than Save for Later

Answer & Explanation Solved by verified expert

See Answer