P5-39B The adjusted trial balance of Daddy’s Music Company at April 30, 2012, follows:

Price: $3.99

P5-39B Making closing entries, preparing financial statements, and

computing gross profit percentage, inventory turnover, and days in inventory

[20–30 min]

The adjusted trial balance of Daddy’s Music Company at April 30, 2012, follows:

DADDY’S MUSIC COMPANY

Adjusted Trial Balance

April 30, 2012

Cash		4,300
Accounts receivable		38,200
Inventory		17,800
Supplies		600
Furniture		39,400
Accumulated depreciation			9,000
Accounts payable			13,600
Salary payable			1,200
Unearned sales revenue			6,600
Note payable, long–term			14,000
Otousan, capital			40,100
Otousan, drawing		40,000
Sales revenue			180,000
Sales returns		8,000
Cost of goods sold		81,800
Selling expense		19,200
General expense		14,000
Interest expense		1,200
Total

Requirements

1. Journalize Daddy’s closing entries.

2. Prepare Daddy’s single-step income statement for the year.

3. Compute the gross profit percentage, the rate of inventory turnover, and the

days in inventory for the fiscal year ending April 30, 2012. Inventory on hand

one year ago, at April 30, 2011, was $13,000.

4. For the year ended April 30, 2011, Daddy’s gross profit percentage was 50%, and

inventory turnover was 4.9 times. Did the results for the year ended April 30, 2012,

suggest improvement or deterioration in profitability over last year?