Assume that Vangundy Company uses a periodic inventory system and has these account balances:

Purchases $490,000$; Purchase Returns and Allowances $14,000$; Purchase Discounts $12,000$;

and Freight$-$In $15,000.$

Instruction:

Determine net purchases and cost of goods purchased. The financial statements of Grogan Company appear below:

GROGAN COMPANY

Comparative Statements of Financial Position

December $31,$

Assets

$\frac{?}{\text{b}\text{a}\text{r}}($ Property, plant and equipment $(net))$

Inventory

Accounts receivable $($net$)$

Short$-$term investments

Cash

Total assets

Equity and liabilities

Share capital $-$ ordinary.

Retained earnings

Bonds payable

Accounts payable

Short$-$term notes payable

Total equity and liabilities

$$150,000,$$$150,000$

$110,000,70,000$

$80,000,160,000$

$20,000,30,000$

$40,000,90,{000}_{?}$

$$400,{000}_{{?}_{?}},$$$500,{000}_{{?}_{?}}$

GROGAN COMPANY

Income Statement

For the Year Ended December $31,2024$

Net sales

Cost of goods sold

Gross profit

Operating expenses

Income from operations

Interest expense

Income before income taxes

Income tax expense

Net income

Additional information:

a$.$ Cash dividends of $$23,000$ were declared and paid in $2024.$

b$.$ Weighted$-$average number of ordinary shares outstanding during $2024$ was $30,000$ shares.

c$.$ Market value of ordinary shares on December $31,2024,$ was $$21$ per share.

Instruction:

Using the financial statements and additional information, compute the following ratios for Grogan

Company for $2024.$ Show all computations.

Current ratio.

$2.$Return on ordinary shareholders' equity.

$3.$Price$-$carnings ratio.

$4.$Acid$-$test ratio.

$5.$Accounts receivable turnover.

Times interest earned.

Profit margin.

Days in inventory.

Payout ratio.

Return on assets. The following ratios have been computed for Morgan Company for $2024.$

Profit margin

Times interest earned

Accounts receivable turnover

Acid$-$test ratio

Current ratio

Debt to total assets ratio

$12\mathrm{.}5\%$

$8$ times

$4$ times

$2$:$1$

$3$:$1$

$20\%$

$2$:$1$

$3$:$1$

$20\%$

Morgan Company's $2024$ financial statements with missing information follow:

MORGAN COMPANY

Comparative Statements of Financial Position

December $31,$

Assets

Property, plant, and equipment $($net$)$

Inventory

Accounts receivable $($net$)$

Short$-$term Investments

Cash

Total assets

Equity and liabilities

Share capital $-$ ordinary

Retained earnings

Bonds payable

Accounts payable

Short$-$term notes payable.

Total equity and liabilities

MORGAN COMPANY

Income Statement

For the Year Ended December $31,2024$

Net sales

Cost of goods sold.

Gross profit

Expenses:

Depreciation expense

Selling expenses

Administrative expenses

Income from operations

Interest expense

Income before income taxes.

Income tax expense

Net income

$$200,000$

$\frac{75,000}{125,000}$Principles of Accounting

Final Exam Preparation Questions

On October $1,$ Belton Bicycle Store had an inventory of $20$ bicycles at $$200$ each. During October,

the following transactions occurred.

Oct. $4$ Purchased $25$ bicycles at $$200$ each from Kuhn Bicycle Company, terms $2/10,$ n$/30.$

$6$ Sold $15$ bicycles to Team America for $$300$ each, terms $\frac{2}{10},\frac{n}{30}.$

$7$ Received credit from Kuhn Bicycle Company for the return of $2$ defective bicycles.

$13$ Issued a credit memo to Team America for the return of a defective bicycle.

$14$ Paid Kuhn Bicycle Company in full, less discount.

Instructions

Prepare the journal entries to record the transactions assuming the company uses:

A$.$ a perpetual inventory system.

B$.$ a periodic inventory system.

Financial information is presented below for two different companies.

Instruction

Determine the missing amounts.

Kennedy Company had the following account balances at year$-$end: cost of goods sold $$85,000$;

inventory $$15,000$; operating expenses $$39,000$; sales revenue $$144,000$; sales discounts $$1,600$;

and sales returns and allowances $$2,300.$ A physical count of inventory determines that inventory

on hand is $$14,400.$

Instructions

A$.$ Prepare the adjusting entry necessary as a result of the physical count.

B$.$ Prepare closing entries.