The adjusted trial balance of Arctic Cat RVs at December 31, 2009, follows.

Requirements 

1. Journalize Arctic Cat's closing entries.

2. Compute the gross profit percentage and the rate of inventory turnover for 2009. Inventory on hand at December 31, 2008, was $40,000. For 2008 Arctic Cat's gross profit percentage was 50% and the inventory turnover rate was 3.0 times. Do the trends in these ratios suggest improvement or deterioration in profitability?

3. Additional inventorv data:

Compute Arctic Cat's cost of goods sold under the periodic inventory system. Does your computed amount agree with Arctic Cat's adjusted balance of cost of goods sold? It should.

Transcribed Image Text:

Adjusted Trial Balance Account Title Debit Credit Cash 7,000 Accounts receivable 4,500 Inventory 42,000 Supplies 1,500 Building 140,000 Accumulated depreciation 29,000 Accounts payable 11,000 Salary payable 200 Unearned sales revenue 1,600 Note payable, long-term 30,000 B. Bonds, capital 111,600 B. Bonds, withdrawals 45,000 Sales revenue 201,400 Sales returns 14,000 Cost of goods sold 101,000 Selling expense 17,900 General expense 9,900 Interest expense 2,000 Total 384,800 384,800