The Following Is a List of Selected Events for Outdoor

question 13

Essay

The following is a list of selected events for Outdoor World for Year 1. Outdoor World uses a perpetual inventory system and had an inventory balance of zero prior to these transactions.Purchased merchandise on account for $170,000.Sold inventory costing $124,000 for $208,000 on account.Paid transportation-out cost of $7,000 on goods sold.Paid other operating expense of $55,200.Sold land for $45,400 that had cost $50,000.A count of the inventory revealed that there was $45,800 of inventory on hand at the end of Year 1.
Required:Answer the following questions based on the above information.What was Outdoor World's net income for Year 1?Compute gross margin and the gross margin percentage that would be shown on the common size income statement for Year 1.What amount of inventory will appear on the balance sheet for December 31, Year 1?Based on the above information, prepare a multistep income statement for Year 1.

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Definitions:

Income Statement

A financial statement that shows a company's revenue, expenses, and net income or loss over a specific period.