Problem: The accounting records of Speed Up Auto Parts on August 31, 2008, list the following amounts:
Cost of Goods Sold.............................................$104,000
Sales Discounts................................................... 4,600
Equipment........................................................... 65,200
Salary Payable.................................................... 2,200
Accounts Payable................................................ 19,500
Cam Engine, Withdrawals................................... 31,600
Sales Returns and Allowances............................ 14,300
Selling Expenses................................................. 21,400
Cash................................................................... 15,700
Inventory, August 31, 2007................................ 40,000
Inventory, August 31, 2008................................ 43,200
Sales Revenue................................................... 206,500
Notes Payable.................................................... 6,100
Accumulated Depreciation, Equipment............... 17,700
Cam Engine, Capital........................................... 66,000
General and Administrative Expenses................ 15,100
Accounts Receivable.......................................... 6,900
Requirements:
*Please see attachment L5A2.xsl
Question 1. Prepare a multi-step income statement to show the computation of Speed Up Auto Parts' net sales revenue, gross profit, and net income for the year ended August 31, 2008.
Question 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
Question 3. Compute the company's gross profit percentage and rate of inventory turnover for 2008.