RWP6-1 (Algo) Great Adventures Continuing Case

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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 2025. All watches are sold for $506 each.

July 17	Purchased 56 watches for $8,736 ($156 per watch) on account.
July 31	Sold 46 watches for $23,276 cash.
August 12	Purchased 46 watches for $7,636 ($166 per watch) cash.
August 22	Sold 36 watches for $18,216 on account.
September 19	Paid for watches purchased on July 17.
September 27	Receive cash of $12,600 for watches sold on account on August 22.
October 27	Purchased 86 watches for $15,136 ($176 per watch) cash.
November 20	Sold 96 watches for $48,576 cash.
December 4	Purchased 112 watches for $20,832 ($186 per watch) on account.
December 8	Sold 46 watches for $23,276 on account.

RWP6-1 (Algo) Great Adventures Continuing Case Part 1

Required:

1-a. Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2025, assuming Suzie uses a FIFO perpetual inventory system to account for inventory. 1-b. Prepare the gross profit section of a partial income statement for transactions related to MU watches.