P7-4 Reporting the Effects of Inventory Costing Methods on Financial Statement Elements and Evaluating Inventory Management (AP7-2) L07-3, 7-6 Kramer Corp. reported the following sale and purchase transactions related to a specific product in January 2021: Page 414 Date Jan. 1 Jan. 3 Jan. 6 Transaction Quantity Unit Cost Unit Sales Price Beginning inventory 5 units $90 Sale on account 3 units $120 Purchase on account Il units 95 Sale on account 4 units Sale on account 5 units 120 Sales returned due to damage, $240 (two units that were sold on January 9). The units were in very poor condition and were destroyed. Jan. 8 120 Jan. 9 Jan. 15 Kramer Corp. uses a perpetual inventory system and the FIFO inventory costing method. Required: 1. Compute net sales and gross profit for January 2021. 2. Determine the inventory turnover ratio and the average days to sell inventory for January 2021, and explain what the numbers me mean. 3. Prepare the journal entries to record the purchase transaction on January 6, the sale transaction on January 8, and the sales return on January 15. 4. Compute the cost of sales for January 2021, assuming for this part only that Kramer uses the weighted average cost method