Selected accounts from the accounting records of Boggio Security had the balances shown below at November 30, 2014. Boggio Security uses the periodic inventory system.
Purchases ................................................................... $ 80,000
Selling Expenses ................................................................ 5,000
Furniture and Fixtures ...................................................... 20,000
Purchase Returns and Allowances ......................................... 500
Salaries Payable ..................................................................... 750
Sales Revenue ................................................................. 102,500
Sales Returns and Allowances ....................................... 950
Inventory: November 30, 2013 ......................................... 18,000
November 30, 2014 ........................................................... 18,500
Accounts Payable ................................................................ 4,500
Accounts Receivable ........................................................... 7,500
Cash ..................................................................................... 1,750
Freight In ................................................................................ 700
Accumulated Amortization-Furniture
and Fixtures .........................................................................8,000
Purchase Discounts ................................................................ 750
Sales Discounts ...................................................................... 800
General Expenses................................................................11,000
Amortization Expense-Furniture and
Fixtures ............................................................................... 2,000
L. Boggio, Capital..............................................................40,950
L. Boggio, Withdrawals.....................................................10,250
Required
1. Show the computation of Boggio Security's net sales, cost of goods sold, and gross margin for the year ended November 30, 2014.
2. Len Boggio, the proprietor of Boggio Security, strives to earn a gross margin percentage of 25 percent. Did he achieve this goal?
3. Did the rate of inventory turnover reach the industry average of 3.8 times per year?