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:

Conventional Budgeting

A traditional approach to budgeting that involves planning income and expenditures for a fixed period.

Resource Consumption

The process of using resources such as materials, energy, or time, typically quantified for analysis and optimization in various contexts.

Two-Way Analysis

A method used in statistics or research to examine the effect of two different variables on an outcome simultaneously.

Overhead Variances

Overhead Variances are differences between the actual overhead incurred and the standard or expected overhead, used to assess the efficiency of overhead cost control.