The Top Shop began 2018 with 55,000 units of inventory that cost $22,000. During 2018, The Top Shop purchased merchandise on account for $397,000: (Click the icon to view the purchases.) Cash payments on account totaled $236,000 during the year (ignore purchase discounts). The Top Shop's sales during 2018 consisted of 495,000 units of inventory $742,500, all on account. The company uses the FIFO inventory method. Cash collections from customers were $660,000. Operating expenses totaled $220,600, of which The Top Shop paid $219,000 in cash. The Top Shop credited Accrued Liabilities for the remainder. At December 31, The Top Shop accrued income tax expen at the rate of 30% of income before tax. Read the fequirements Requirement 1. Show how The Top Shop would compute cost of goods sold for 2018. Units Total Cost Units sold from beginning inventory Units sold from Purchase 1 Units sold from Purchase 2 Units sold from Purchase 3 Cost of goods sold 495,000 Enter any number in the edit fields and then click Check Answer ar to) Requirements 1. Show how The Top Shop would compute its cost of goods sold for 2018. 2. Prepare The Top Shop's income statement for 2018. Show subtotals for the gross profit and income before tax. 3. Make summary journal entries to record The Top Shop's transactions for the year, assuming the company uses a perpetual inventory system. Explanations are not required. 4. Determine the FIFO cost of The Top Shop'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 Top Shop's gross profit percentage, rate of inventory turnover, and net income as a percentage of sales for the year. In The Top Shop'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 Top Shop compare to these industry averages? Print Done Clear All H. Data Table Purchase 1 110,000 units costing $ 88,000 176,000 Purchase 2 220,000 units costing Purchase 3 190,000 units costing 133,000 Print Done