Need help with assignment 4 in my accounting class. I attached a template of the journal and t-ledger accounts. I also attached the original assignment of all 3 parts and my attempt at Problem 1 and 2 titled "Assignment 4 - Rimaz Yousif". I also don't understand how to approach Problem 3 of the assignment.

ACCOUNTING ASSIGNMENT 4 (A) DATE 1 2 3 4 5 6 7 8 JOURNAL ACCOUNTS DEBIT CREDIT (B) T- LEDGER ACCOUNTS D Merchandise Inventory D D D Sales C Account Receivable Sales Discount C Merchandise Inventory Balance = Net Sales= Gross Profit on Sale= Gross Profit Rate: D D C (C) COGS Balance = C D D Account Payable C Sales Return/Allowance C Cash Cost of Goods C C PROBLEM 2 Gross profit on Sale= Gross Profit Rate : Net Income = Total Assets = Total Liabilities = Total Stockholders' Equity = PROBLEM 3 Sources Used: Lesson 04 Online Commentary (Pg. 5-7, 19-22), Financial and Manager Date Description 1 Merchandise Inventory Accounts Payable 2 Accounts Payable Merchandise Inventory 3 Accounts Payable Cash Merchandise Inventory 4 Accounts Receivable Cost of Goods Sold Sales Merchandise Inventory 5 Sale Returns of Allowance Merchandise Inventory Accounts Receivable Cost of Goods Sold 6 Cash Sales Discount Accounts Receivable 7 Merchandise Inventory Cash 8 Cost of Goods Sold Merchandise Inventory Debit Credit 140,000 140,000 5,000 5,000 135,000 132,300 2,700 25,000 $10,000 $25,000 10,000 3,000 $2,000 $3,000 2,000 $21,560 400 $22,000 $300 $300 $700 $700 -22), Financial and Managerial Accounting (pg. 14-18, 24, 25, 110-112, 123-124, 152-154) Ref. 1) 5) 7) Balance Ref. Merchandise Inventory Ref. $140,000 $5,000 2) $2,000 $2,700 3) $300 $10,000 4) $700 8) $142,300 Sales Balance Ref. 2) 3) Account Payable $5,000 $135,000 $18,400 Balance $140,000 Ref. $25,000 4) Ref. 5) $25,000 Balance Ref. 6) Cash Ref. $21,560 $132,300 3) $300 7) Ref. 4) Balance $21,560 Balance $132,600 Sales Return/Allowance $3,000 $3,000 Accounts Receviable $25,000 $25,000 Account Payable Ref. $140,000 1) Ref. 4) 8) Cost of Goods Ref. $10,000 $2,000 5) $700 Balance $10,700 $2,000 $140,000 Sales Return/Allowance Ref. Ref. 6) Balance Accounts Receviable Ref. $3,000 5) $22,000 6) $25,000 Sales Discount $440 $440 Ref. Merchandise Inventory Balance $123,900 Cost of Goods Sold Balance $8,700 Net sales $21,560 Gross Profit on Sales $12,860 Gross Profit Rate $12,860/$21,560 = 59.6% Gross Profit on Sales Gross Profit Rate Net Income Retained Earnings Total Assets Total Liabilities Total Stockholders' Equity $49,000 55% $25,000 $32,000 $171,000 $16,000 $155,000 SGA INCORPORATED INCOME STATEMENT For month ended December 31, 2003 Sales Less Sales Returns & Allowances Sales Discounts 9,000 2,000 Salaries Expense Total Selling Expenses 4,000 Rent Expense Supplies Expense Utilities Expense Insurance Expense Total Administrative Expenses 5,000 9,000 5,000 1,000 Net Sales COGS Gross Profit Operating Expense Selling Expense Administrative Exprenses Total Operating Expenses Net Income 3 100,000 11,000 89,000 40,000 49,000 SGA INCORPORATED Statement of Retained Earnings As of Decemeber 31, 2003 Retained Earnings Dec 1,2003 Add: Net Income for Dec Subtotal Less: Dividends 7,000 Retained Earnings Dec 31,2003 SGA INCORPORATED Balance Sheet As of December 31, 2003 Assets 4,000 20,000 24,000 49,000 Cash Accounts Receivable Merchandise Inventory Supplies Unexpired Insurance Equipment Less: Acc Dep 20,000 5,000 Total Assets Liabilties Accounts Payable Unearned Fees Total Liabilites Owner's Equity Capital Stock Retained Earnings Total Owner's Equity Total Liabilties & Owner's Equity nings 03 14,000 25,000 39,000 32,000 03 40,000 10,000 100,000 3,000 3,000 15,000 171,000 10,000 6,000 16,000 123,000 32,000 155,000 171,000 ASSIGNMENT 4: INVENTORY Problem 1(58%) Assume you are using perpetual inventory system: A) Record the below transactions in a journal B) Post the transactions to T-Ledger Accounts. C) Then determine the followings Merchandise Inventory Balance $ COGS Balance $ Net Sales $ Gross Profit on Sales $ Gross Profit Rate Transactions 1. Purchased goods for $140,000 on credit with terms 2/10, n/30. 2. Returned $5,000 of the merchandise. 3. Paid for the merchandise in transaction 1 within 10 days. 4. Sold goods for $45,000 on credit with terms 2/10, n/30. The cost of the goods was $25,000. 5. $4,000 of the goods in transaction 4 was returned. Sale price of goods was $7,000. 6. Received payment for transaction 4 within 10 days. 7. Goods in transaction 1 were purchased with FOB shipping point. The transportation cost $300 was paid in cash. 8. It's discovered that $700 worth of goods was missing. PROBLEM 2(14 points) The following are the account balances from the Adjusted Trial Balance of SGA Incorporated as of December 31, 2003. Cash Equipment Accumulated Depreciation Unearned Fees Merchandise Inventory Supplies Accounts Receivable Unexpired Insurance Capital Stock Dividends Accounts Payable 40,000 20,000 5,000 6,000 100,000 3,000 10,000 3,000 123,000 7,000 10,000 Rent Expense Supplies Expense Salaries Expense Utilities Expense Retained Earnings, Jan. 1 Insurance Expense Sales Sales Returns & Allowance Sales Discounts Cost of Goods Sold Instructions Use the above account balances and calculate the following. 1. Gross Profit on Sales $ 2. Gross Profit Rate 3. Net Income $ 4. Retained Earnings $ 5. Total Assets $ 6. Total Liabilities $ 7. Total Stockholders' Equity is $ 5,000 9,000 4,000 5,000 14,000 1,000 100,000 9,000 2,000 40,000 PROBLEM 3(28 points) 1. On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method? Oct. 1 Oct. 1-31 Oct. 1-31 Merchandise Inv . . . . Purchases (net) . . . . . Sales (net) . . . . . . . . . Cost $225,000 335,000 Retail $324,500 475,500 600,000 ANSWER_____________ 2. If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on June 30, based on the following data? June 1 June 1-30 June 1-30 Merchandise Inv . . . . Purchases (net) . . . . . Sales (net) . . . . . . . . $ 75,000 $150,000 $135,000 ANSWER______________ 3. Too much inventory on hand: A. B. C. D. reduces solvency increases the cost to safeguard the asset increases the losses due to price declines all of the above 4. Inventory turnover: A. is computed by dividing average inventory by cost of merchandise sold B. measures the relationship between the volume of goods sold and amount of inventory carried C. increases the risk of loss from damaged merchandise D. is computed by dividing the beginning inventory plus the ending inventory by two E. None 5. Under a perpetual inventory system, when a shortage is discovered: A. B. C. D. 6. Merchandise Inventory is debited Cost of Merchandise Sold is credited Inventory Shortages is credited Merchandise Inventory is credited E. None The inventory data for an item for the month of May are as follows: May 1 Inventory . . . . . . . . . . . . . . . . . . . . . . . 20 units at $50 5 Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 units 10 Purchased . . . . . . . . . . . . . . . . . . . . . . 30 units at $55 20 Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 units 29 Purchased . . . . . . . . . . . . . . . . . . . . . . 29 units at $60 7. What is the cost of the merchandise inventory of 25 units on May 31 by the last-in, first-out method if the periodic system is used: A. $1,500 B. $1,275 C. $1,475 D. $1,250 E. None The following lots of a particular commodity were available for sale during the year: Beginning inventory . . . . . . . . . . . . . . . . . . . . 10 units at $60 First purchase . . . . . . . . . . . . . . . . . . . . . . . . . 25 units at $63 Second purchase . . . . . . . . . . . . . . . . . . . . . . . 30 units at $64 Third purchase . . . . . . . . . . . . . . . . . . . . . . . . 15 units at $71 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of this inventory according to the first-in, first-out method? A. B. C. D. 8. $1,200 $1,230 $1,385 $1,400 E. None The inventory data for an item for November are: Nov. 1 4 10 17 30 9. Inv . . . . . . . . . . . . . . . . . . . 20 units at $20 Sold . . . . . . . . . . . . . . . . . . 10 units Purchased . . . . . . . . . . . . . 30 units at $21 Sold . . . . . . . . . . . . . . . . . . 20 units Purchased . . . . . . . . . . . . . 10 units at $22 Using the perpetual system, costing by the first-in, first-out method, what is the cost of the merchandise inventory of 30 units on November 30? A. $640 B. $610 C. $620 D. $630 E. None During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is: A. B. C. D. fifo lifo average cost weighted averag E. None 10. If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is: A. B. C. D. periodic lifo fifo average E. None 11. If merchandise inventory is being valued at cost and the price level is consistently rising, which method of costing will yield the largest gross profit? A. B. C. D. average cost lifo fifo weighted average E. None 12. If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest gross profit? A. B. C. D. average cost lifo fifo weighted average E. None 13. Determine the Inventory turnover from following information: Beginning Inventory(B.I)= $100, 000 Ending inventory(E.I)= $120, 000 Cost of goods sold(COGS)= $10, 000, 000 14. Use your finding from previous question: If the industry average for inventory turnover is 40, compare your inventory turnover to the industry average. Are you doing better than industry average? Why or Why not