# A140/ACG1022 Section 14 Financial Accounting I – Winter 2013 Module 9

assignment_mod_09.xlsx

Whitewater Co. lost its entire inventory in a flash flood that occurred on August 31, 20##. Review the recovered records for August in the

Excel Template

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Requirements:

1. Estimate the August 31 inventory using the gross profit method.
2. Prepare the August income statement through gross profit for Whitewater Co.
3. Calculate the Inventory Turnover Ratio for Whitewater for years 2009 and 2010.
4. Provide a reason why the Inventory Turnover has changed from the previous year.

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>M9 Assignment

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 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. Income Statement

## M9 Assignment 2

and

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2010 2009

\$38

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Requirements:

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2010

=

2009

=

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 Module 9 Assignment 2: P.F. Johnson has the following information for the years ending December 31, 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 13 Cost of Goods Sold 161 160 Gross Profit \$81 \$79 Operating Expenses 55 54 Net Income \$26 \$25 Compute the inventory turnover rate for P.F. Johnson for 2009 and 2010. Round to two decimal places. Inventory turnover = Inventory turnover = What is the likely cause of the change in turnover rate from 2009 to 2010?