The gross sales from whole 2020 period were 31000 and the sales returns were 4%. Additionally, the company is offering 4% of cash discount of sales to their customers (the cash sales was 23250). At the beginning of the period December 31, 2019 the merchandise inventory level was 10 100 and during the year 2020 the company purchased 15500 of merchandise with 4% cash discount (the cash purchases was 6200). Due to the low quality of the merchandise the company agreed with the suppliers on 900 purchase allowance. The freight -in cost for the 2020 period were 82. The ending inventory as of December 31, 2020 level was 2600. Please calculate cost of goods sold and gross profit under the periodic system inventory for 2020. Exercise IV (REQUIRED ANYWAY) The Accounting Cycle - Problem Set ABC Company Ltd. Balance Sheet on Nov. 30, 2014 Assets Equities Land 1 000 Paid-in Capital 6 000 Machinery equipment 2 500 Retained Earnings 2 500 Office Store equipment 3 000 Tax payable 1 300 Raw materials Inventory 1 800 Loan Payable 3 000 Office Supplies Inventory 2 500 Salary payables 1 100 Accounts Receivable 5 000 Accounts payable 3 500 Cash, Bank 3 800 Unearned rent revenue 3 000 Prepaid expenses 2 000 Allowance for uncollectible accounts 1 200 21 600 Total equities 21 600 Total assets Summary of transactions during December: 1. Paid outstanding salary payables. 2. Paid outstanding tax payables. 3. Paid outstanding trade creditors in the amount of 1 500. 4. Salaries to employees of 1600 were calculated for December and will paid in January. 5. Purchase of 2 500 of Office Supplies Inventory with 4% cash discount for cash transaction. 6. Purchase of raw materials Inventory of 400 was done with three-month trade credit. 7. Due to the low quality of the purchased office supplies inventory the company returned 500 of inventory that diminished the accounts payable by that amount. 8. The freight in for both supplies and raw material inventory was paid in the amount of 400. 9. Performed services for Customer XYZ, for which we will receive 160 on 2-month credit sale. 10. At the end of month, the Customer XYZ made a claim on the services and we agreed to sales allowance in the amount of 4%. 11. Performed consulting services, in the amount of 160 with 4% for cash discount on sales (cash immediately received). 12. In November 2014 we performed additional consulting work, 3 000 on credit (4/30, n 90) and in December 2014 the customer used the discount for prompt payment. 13. The cost of raw materials inventory used during December is 1 200. 14. In the beginning of October 2014, a subscription rights for local newspaper magazine of 4 000 was paid for four-month term in advance. 15. In the beginning of September 2014 company receives rent for 6 months in advance, 6,000 16. At the end of the month Company repaid to the Bank credit tranche 1 000 and paid interest charges (interest rate as of 4% p.a.) 17. Depreciation of machinery equipment for December amounts to 500. Required: a) Prepare the opening journal entry on Dec. 1, 2014. b) Prepare the journal entries for the transactions (1-17) for the month of December and post them to the T-accounts, opening additional T-accounts for accounts as needed. c) Prepare the closing entries for the temporary accounts and the Income Statement. d) Prepare the closing entries for the permanent accounts and the Balance Sheet as of Dec. 31, 2014. 60 / 100