The Dancing Goat began 2018 with 30,000 units of inventory that cost $27,000. During 2018, The Dancing Goat purchased merchandise on account for $368,000: (Click the icon to view the purchases.) Cash payments on account totaled $291,000 during the year (ignore purchase discounts). The Dancing Goat's sales during 2018 consisted of 490,000 units of inventory for $980,000, all on account. The company uses the FIFO inventory method. Cash collections from customers were $570,000. Operating expenses totaled $280,300, of which The Dancing Goat paid $225,000 in cash. The Dancing Goat credited Accrued Liabilities for the remainder. At December 31, The Dancing Goat accrued income tax expense at the rate of 40% of income before tax. Read the requirements. Requirement 1. Show how The Dancing Goat would compute cost of goods sold for 2018. Units Total Cost Data table 30,000 27,000 Units sold from beginning inventory Units sold from Purchase 1 Units sold from Purchase 2 120,000 96,000 220,000 176,000 $ 96,000 Purchase 1 120,000 units costing Purchase 2 220,000 units costing Units sold from Purchase 3 120,000 176,000 490,000 Cost of goods sold Purchase 3 160,000 units costing 96,000 Print Done Requirements 1. Show how The Dancing Goat would compute its cost of goods sold for 2018. 2. Prepare The Dancing Goat's income statement for 2018. Show subtotals for the gross profit and income before tax. 3. Make summary journal entries to record The Dancing Goat's transactions for the year, assuming the company uses a perpetual inventory system. Explanations are not required. 4. Determine the FIFO cost of The Dancing Goat's ending inventory at December 31, 2018, two ways: a. Use a T-account. b. Multiply the number of units on hand by the unit cost. 5. Determine The Dancing Goat's gross profit percentage, rate of inventory turnover, and net income as a percentage of sales for the year. In The Dancing Goat's industry, a gross profit percentage of 40%, an inventory turnover of six times per year, and a net income percentage of 7% are considered excellent. How well does The Dancing Goat compare to these industry averages? Print Done