The Gift Horse began 2021 with 60,000 units of inventory that cost $36,000. During 2021 , The Gift Horse purchased merchandise on account for $352,500 : (Click the icon to view the purchases.) Cash payments on account totaled $326,000 during the year (ignore purchase discounts). The Gift Horse's sales during 2021 consisted of 520,000 units of inventory for $660,000, all on account. The company uses the FIFO inventory method. Cash collections from customers were $630,000. Operating expenses totaled $240,500, of which The Gift Horse paid $211,000 in cash. The Gift Horse credited Accrued Liabilities for the remainder. At December 31, The Gift Horse accrued income tax expense at the rate of 35% of income before tax. Read the requirements. Requirements Requirement 1. Show how The Gift Horse would compute cost of goods sold for 2021. 1. Show how The Gift Horse would compute its cost of goods sold for 2021. 2. Prepare The Gift Horse's income statement for 2021. Show subtotals for the gross profit and income before tax. 3. Make summary journal entries to record The Gift Horse's transactions for the year, assuming the company uses a perpetual inventory system. Explanations are not required. 4. Determine the FIFO cost of The Gift Horse's ending inventory at December 31, 2021, two ways: a. Use a T-account. b. Multiply the number of units on hand by the unit cost. 5. Determine The Gift Horse's gross profit percentage, rate of inventory tumover, and net income as a percentage of sales for the year. In The Gift Horse's Data table 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 Gift Horse compare to these industry averages