Selected accounts from the accounting records of Burke Imports at September 30, 2014, are shown below. Burke Imports uses the periodic inventory system.
Cash ........................................................................ $ 14,300
Purchases ................................................................. 103,100
Freight In ........... ......................................................... 3,100
Sales Revenue .......... ............................................... 188,200
Purchases Returns and Allowances ............................. 1,600
Salaries Payable ........................................................... 2,200
Glen Burke, Capital ................................................... 33,400
Sales Returns and Allowances .................................... 5,300
Inventory: September 30, 2013 ................................. 23,100
September 30, 2014 ................................................... 25,700
Selling Expense ......................................................... 34,200
Equipment ................................................................. 48,000
Purchase Discounts ..................................................... 1,365
Accumulated Amortization-Equipment ................ 9,600
Sales Discounts ........................................................... 3,600
General Expenses ...................................................... 18,500
Accounts Payable ...................................................... 14,700
Accounts Receivable ................................................. 17,200
Required
1. Show the computation of Burke Imports' net sales, cost of goods sold, and gross margin for the year ended September 30, 2014.
2. Glen Burke, owner of Burke Imports, strives to earn a gross margin percentage of 40 percent. Did he achieve this goal?
3. Did the rate of inventory turnover reach the industry average of 3.4 times per year?