Financial Accounting: P5-31A The adjusted Trial balance of Big Papi Music Company

Financial Accounting

P5-31A Making closing entries, preparing financial statements, and computing gross profit percentage, inventory turnover, and days in inventory
The adjusted Trial balance of Big Papi Music company at June, 30 2012 follows:
Adjusted Trial Balance
June 30, 2012
Account Debit Credit
Cash 3,600
Accounts receivable 38,800
Inventory 17,200
Supplies 200
Furniture 40,000
Accumulated depreciation 8,400
Accounts payable 13,300
Salary payable 1,200
Unearned sales revenue 6,700
Note Payable, long term 15,000
Papi, capital 36,000
Papi, drawing 40,500
Sales revenue 180,000
Sale returns 5,000
Cost of goods sold 82,500
Selling expense 19,200
General Expense 12,000
Interest Expense 1,600
Total $260,600 $260,600

1. Journalize Big Papi's Closing entries
2. Prepare Big Papi's single-step income statement for the year
3. Compute the gross profit percentage, the rate of inventory turnover, and the days in inventory for the fiscal year ending June 20, 2012. Inventory on hand one year ago, at June 30, 2011, was $12,200.
4. For the year ended June 30, 2011 Big Papi gross profit percentage was 50%, and inventory turnover was 4.9 times. Did the result for the year ended June 30, 2012 suggest improvement or deterioration in profitability over last year?
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