Question

Periodic System— Using Knowledge of Financial Statement Relations to Compute Missing Accounts

The following information relates to Payleast Shoes Company. Assuming the company uses the periodic inventory system, solve for the missing amounts a through m for years 2020 through 2022.

• Do not use negative signs in your answers.
• Round gross profit percentage to the nearest whole percentage point.

		2020		2021		2022
Net sales		$90,000		$110,000		$130,000
Beginning inventory		12,000	e.		j.
Purchases (gross)		70,000		82,500		99,000
Purchase returns and allowances		6,000		5,000		8,800
Purchase discounts		4,000		2,500		1,900
Freight-in		3,000		f.		10,000
Cost of goods available for sale	a.			93,500	k.
Ending inventory		15,000	g.			26,000
Cost of sales	b.			75,500	l.
Gross profit	c.		h.			39,700
Gross profit percentage	d.		i.		m.

Answer 1

	2020	2021	2022
Net Sales	$       90,000	$ 1,10,000	$ 1,30,000
Beginning Inventory	$       12,000	$     15,000	$     18,000
Purchases gross	$       70,000	$     82,500	$     99,000
Purchase returns and allowances	$         6,000	$       5,000	$       8,800
Purchase discounts	$         4,000	$       2,500	$       1,900
Freight - In	$         3,000	$       3,500	$     10,000
Cost of goods available for sale	$       75,000	$     93,500	$ 1,16,300
Ending Inventory	$       15,000	$     18,000	$     26,000
Cost of sales	$       60,000	$     75,500	$     90,300
Gross profit	$       30,000	$     34,500	$     39,700
Gross Profit percentage	33%	31%	31%