Module 9 Assignment 1 and 2 : Whitewater Co. and PF Johnson — w/ Solutions!!!

Module 9 Assignment 1:

Whitewater Co. lost its entire inventory in a flash flood that occurred on August 31, 20##. 

Over the past 4 years gross profit has averaged 32% of net sales. The following records for August were recovered:

Beginning Inventory

$38

Net Purchases

$341,900

Sales

$530,400

Sales returns and allownaces

$12,300

Sales discounts

$6,500

Requirements:

Estimate the August 31 inventory using the gross profit method.

Prepare the August income statement through gross profit for Whitewater Co.

Module 9 Assignment 2:

2009

2010

Sales Revenue

$242

$239

Cost of Goods Sold:

     Beginning Inventory

$22

     Net Purchases

152

144

     Goods Available for Sale

$174

$182

     Ending Inventory

     Cost of Goods Sold

161

160

Gross Profit

$81

$79

Operating Expenses

Net Income

$26

$25

Compute the inventory turnover rate for P.F. Johnson for 2009 and 2010. Round to two decimal places.

What is the likely cause of the change in turnover rate from 2009 to 2010?