The Davis Lamp Company (DLC) is a wholesale company that purchases lamps from the manufacturer and resells them to retail stores. The company has three inventory items: desk lamps, table lamps, and floor lamps. DLC uses a perpetual inventory system—
FIFO method. DCL owns land with a building, which is separated into two parts: office space and warehouse space. All expenses associated with the office are categorized as Administrative Expenses. All expenses associated with the warehouse, which is used for the shipping and receiving functions of the company, are categorized as Selling Expenses. In addition to the land and building, DLC also owns office furniture and equipment and warehouse fixtures. The company uses one accumulated depreciation account for all the depreciable assets.
The trial balance for DLC as of September 30, 2024 follows:

During the fourth quarter of 2024, DLC completed the following transactions

Requirements 1. Open general ledger T-accounts and enter opening balances as of September 30, 2024.
2. Open inventory records for the three inventory items and enter opening balances as of September 30, 2024. Complete the inventory records using the following transactions: Oct. 1, 12, 15, 28; Nov. 1, 5, 15, 18, and Dec. 27.
3. Record the transactions in the general journal.
4. Post transactions to the general ledger.
5. Prepare adjusting entries for the year ended December 31, 2024, and post to the ledger:

a. Depreciation, $48,500 (75% selling, 25% administrative).

b. Supplies on hand: office, $200; and warehouse, $650.

c. A physical inventory account resulted in the following counts: desk lamps, 1,990; table lamps, 5,995; and floor lamps, 6,000. Update the inventory records.
6. Prepare an adjusted trial balance.
7. Provide a summary for the month, in both units and dollars, of the change in inventory for each item in the following format

Does the sum of the ending balances in the inventory records match the balance in Merchandise Inventory in the general ledger? If not, review the transactions to find your error.
8. Prepare Davis Lamp Company’s multi-step income statement and statement of retained earnings for the year ended December 31, 2024, and a classified balance sheet as of December 31, 2024.

 9. Calculate the following ratios for DLC as of December 31, 2024: gross profit percentage, inventory turnover, and days’ sales in inventory.
10. Record and post the closing entries.
11. Prepare a post-closing trial 9. Calculate the following ratios for DLC as of December 31, 2024: gross profit
percentage,
inventory turnover, and days’ sales in inventory.
10. Record and post the closing entries.
11. Prepare a post-closing trial balance.

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Account Cash Accounts Receivable Merchandise Inventory Office Supplies Warehouse Supplies Land Building Office Furniture and Equipment DAVIS LAMP COMPANY Trial Balance September 30, 2024 Warehouse Fixtures Accumulated Depreciation Accounts Payable Common Stock Retained Earnings Dividends Sales Revenue Cost of Goods Sold Salaries Expense-Selling Utilities Expense-Selling Supplies Expense-Selling Depreciation Expense-Selling Salaries Expense-Administrative Utilities Expense-Administrative supplies Expense-Administrative Depreciation Expense-Administrative Total Debit $ 457,000 0 126,000 275 350 20,000 780,000 125,000 260,000 Balance 1,061,450 270,000 32,000 0 0 90,000 25,000 0 0 $ 3,247,075 Credit $ 194,000 0 100,000 298,925 2,654,150 $ 3,247,075