The accounting records of Speed Up Auto Parts on August 31, 2008, list the following amounts:
- Cost of Goods Sold104,000
- Sales Discounts4,600
- Equipment65,200
- Salary Payable2,200
- Accounts Payable19,500
- Cam Engine, Withdrawals31,600
- Sales Returns & Allowances14,300
- Selling Expenses21,400
- Cash15,700
- Inventory, Aug. 31, 200740,000
- Inventory, Aug. 31, 200843,200
- Sales Revenue206,500
- Notes Payable6,100
- Accumulated Depreciation, Equipment17,700
- Cam Engine, Capital66,000
- General & Administrative Expenses15,100
- Accounts Receivables6,900
Requirements:
1. Prepare a multistep income statement to show the computation of Speed Up Auto Parts net sales revenue, gross profit, and net income for the year ended Aug. 31, 2008.
2. Cam Engine, owner of the business, strives to earn gross profit of $85,000 and net income of $45,000. Did Cam achieve these goals? Explain.
3. Compute the company's gross profit percentage and rate of inventory turnover for 2008.