The Following Is a List of Selected Events for Outdoor

question 134

Essay

The following is a list of selected events for Outdoor World for 2016.Outdoor World uses a perpetual inventory system and had a zero inventory balance prior to these transactions.
1)Purchased merchandise on account for $170,000.
2)Sold inventory costing $124,000 for $208,000 on account.
3)Paid transportation-out cost of $7,000 on goods sold.
4)Paid operating expense of $55,200.
5)Sold land for $45,400 that had cost $50,000.
6)A count of the inventory revealed that there was $45,800 of inventory on hand at the end of 2016.
Required: Answer the following questions based on the above information.
a)What was Outdoor World's net income for 2016?
b)Compute gross margin and the gross margin percent for 2016.
c)What amount of inventory will appear on the balance sheet for December 31,2016?
d)Based on the above information,prepare a multistep income statement for 2016.

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Definitions:

Right Of Inspection

A buyer's privilege to examine goods before finalizing a purchase to confirm they meet the agreed standards and specifications.

Corporate Articles

Official documents filed with a governmental body to legally document the formation of a corporation.

Four-Year Period

A specified duration of time encompassing four consecutive years, often referenced in contracts, warranties, or statutes of limitation.

Decade

A period of ten years.