In: Accounting
Question 3: Cora’s Computers uses the Periodic Inventory System and has a December 31st year-end. The company began the year with inventory with a cost of $18,600. When Cora’s staff counted inventory at December 31, inventory with a cost of $22,500 were on hand. The company also had the following account balances for the year (random order, all with normal balances):
Office Supplies Expense 4,700
Purchases $199,500
Sales Discounts 2,400
Advertising Expense 11,300
Interest Income 2,000
Freight In 16,400
Freight Out 12,200
Sales person Salaries 61,500
Sales Returns and Allowances 10,200
Loss on Sale of PP&E 550 Purchase Returns and Allowances 9,800
Sales Revenue 325,000 Purchase Discounts
1,800 Management Salaries 19,800 Required:
1) Prepare a Multi-Step Income Statement (full detail) for the year-ended December 31, 2020.
2) Calculate: a) Gross Margin % b) Inventory Turnover c) Days in Inventory.