Question: Gamma Retail Scenario: Perpetual Inventory System Data: Beginning Inventory: $20,000 Purchases: $100,000 Ending Inventory: $30,000 Sales Revenue: $150,000 Requirements: Calculate the Cost of Goods Sold

  1. Gamma Retail

Scenario: Perpetual Inventory System

Data:

  • Beginning Inventory: $20,000
  • Purchases: $100,000
  • Ending Inventory: $30,000
  • Sales Revenue: $150,000

Requirements:

  1. Calculate the Cost of Goods Sold using the perpetual inventory system.
  2. Determine the average inventory level during the period.
  3. Analyze the impact of inventory turnover on COGS and financial performance.
  4. Discuss how Gamma Retail can improve inventory management.
  5. Prepare an income statement highlighting COGS and gross profit.

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