Following Is a Random List of Some of the Accounts

question 2

Essay

Following is a random list of some of the accounts and their December 31, 2019, balances for Milita Merchandising. Milita Merchandising uses a periodic inventory system and all account balances are normal. $$\begin{array} { l r } \text { Purchases } & \$ 330,000 \\\text { Sales revenue } & 470,000 \\\text { Interest revenue } & 23,000 \\\text { Salary expense } & 45,000 \\\text { Freight in } & 17,000 \\\text { Purchase discounts } & 31,000 \\\text { Sales returns and allowances } & 40,000 \\\text { Interest expense } & 18,000 \\\text { Delivery expense } & 24,000 \\\text { Sales discounts } & 27,000 \\\text { Insurance expense } & 16,000 \\\text { Purchase returns and allowances } & 49,000 \\\text { R. Milita, Capital } & 35,000 \\\text { Utilities expense } & 14,000 \\\text { Amortization expense-equipment } & 10,000 \\\text { R. Milita, Withdrawals } & 18,000\end{array}$$ The beginning and ending amounts for inventory are $58,000 and $65,000, respectively.
Calculate the following for Milita Merchandising: $\begin{array}{llcc} \text { Net sales revenue } &\$\underline{\quad\quad} \\ \text { Net purchases} &\$\underline{\quad\quad}\\ \text { Cost of goods available for sale } &\$\underline{\quad\quad}\\ \text { Cost of goods sold} &\$\underline{\quad\quad}\\ \text {Gross margin } &\$\underline{\quad\quad}\\ \text { Operating income } &\$\underline{\quad\quad}\\ \text { Net income } &\$\underline{\quad\quad}\\\end{array}$

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Definitions:

Common-Size Statements

Financial statements that present all line items as percentages of a common base figure such as total assets or sales, to allow for easy comparison.

Acid-Test Ratio

A financial metric that measures the immediate liquidity position of a company by comparing its most liquid assets (excluding inventory) against its current liabilities.

Marketable Securities

Financial instruments and assets that can be easily sold or converted into cash without a significant loss of value.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.