Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet wont damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2019. All watches are sold for $308 each.

Jul. 17 Purchased 58 watches for $9,164 ($158 per watch) on account. Jul. 31 Sold 48 watches for $14,784 cash. Aug. 12 Purchased 48 watches for $8,064 ($168 per watch) cash. Aug. 22 Sold 38 watches for $11,704 on account. Sep. 19 Paid for watches ordered on July 17. Sep. 27 Received full payment for watches sold on account on August 22. Oct. 27 Purchased 88 watches for $15,664 ($178 per watch) cash. Nov. 20 Sold 98 watches for $30,184 cash. Dec. 4 Purchased 116 watches for $21,808 ($188 per watch) cash. Dec. 8 Sold 48 watches for $14,784 on account.

Part 1

Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2019, assuming Suzie uses FIFO to account for inventory.

Part 2

Prepare the gross profit section of a partial income statement for transactions related to MU watches.